The U.K. government has watered down accountability rules to hold senior bankers liable for employee misconduct.
After much debate, the U.K. Parliament’s Treasury Committee made a last minute change to abandon the “burden of proof” rule for bankers, said a Financial Times report.
The rule could have held senior managers accountable for employee misconduct with the possibility of a fine or a potential ban. As Compliance Week previously reported, this move comes at a time where the financial industry is gearing up to tackle new regulatory changes that will hold bankers accountable for their actions. News reports indicate that the U.K. government is looking to soften the blow of the financial regulation regime and ease the mounting industry concerns that may drive top talent away from London.
The amended Bank of England and financial services parliamentary bill states that while senior managers will have a “statutory duty of responsibility,” it will now be up to the regulators to determine if the right steps were in fact taken to prevent wrongdoing. The bill also covers insurers across the financial sector.
There has been a lot of action in the financial sector for this past year, with the ousting of Martin Wheatley as the head of the Financial Conduct Authority, the new regulatory regime starting to take shape and the latest round of stress tests, which almost all of the banks have passed—George Osborne, the U.K. chancellor has decided to go easy on the scandal-plagued financial sector by softening rules on banker accountability, the Financial Times said.