Global Glimpses

U.K. Sets New Accountability Standards for Bank Executives

Britain’s Financial Conduct Authority has released new rules for its Senior Managers Regime, a compliance standard that will hold senior managers at financial firms personally accountable for corporate misconduct. “We have given clarity on rules that will embed personal accountability into the culture of the city,” Martin Wheatley, FCA chief executive, said. More inside.

EU Vows to Fight Attempts to Sidestep Caps on Banker Bonuses

Sept. 10—New volleys were fired this week in the row over planned European Union caps on banker bonuses. The United Kingdom’s legal challenge of the new regulation began Monday in the European Court of Justice, with U.K. lawyers arguing the rule oversteps the powers of the European Union. Meanwhile, the European Union signaled it is serious about pursuing apparent attempts by financial firms to sidestep the regulation. EU Commissioner for Internal Markets and Services Michel Barnier asked the European Banking Authority to hasten its probe into firms turning to fixed pay “allowances” to avoid the new bonus cap. More inside.

Cyber-Breaches have Skyrocketed

Britain Proposes Regulatory Changes to Satisfy EU Banking Union

Aug. 6—Britain’s financial regulator is proposing changes to its supervisory framework to meet the requirements of the European Union’s Bank Recovery and Resolution Directive by the end of the year. Changes proposed by U.K. Prudential Regulation Authority include new rules on recovery plans, intragroup financial support agreements, and the inclusion of bail-in agreements in contracts. “The financial crisis demonstrated that the authorities did not have the powers or tools needed to deal with failing banks,” Andrew Bailey, head of the PRA, said in a statement. More inside.

U.K. Regulators Seek More Accountability From Banking Sector

July 30—Regulators from the United Kingdom’s Prudential Regulatory Authority and Financial Conduct Authority jointly issued their plans this week for two new sets of rules to boost individual accountability within the banking sector. The first set outlines the specific responsibilities that will be required of senior managers, along with plans for regular vetting of their fitness and pre-approval by regulators. The second, a certification regime, requires firms to regularly certify and assess the fitness of any employee who could pose a risk of significant harm to the firm or its customers. Both regimes stem from legislative changes and official recommendations on banking standards. More inside.