UK solution to banking accountability

The Clown Man

Seems like the UK has actually looked into introducing accountability to banking and it seems to be a step in the right direction based on this report alone.

http://www.bbc.co.uk/news/business-22954586

BBC News wrote:

"Too many bankers, especially at the most senior levels, have operated in an environment with insufficient personal responsibility," the report says.

"Senior executives were aware that they would not be punished for what they could not see and promptly donned the blindfolds.

"Where they could not claim ignorance, they fell back on the claim that everyone was party to a decision, so that no individual could be held squarely to blame - the Murder on the Orient Express defence."

The report advocated:

senior bankers should be assigned clear personal responsibilities, with the legal onus on them to show they have done all that is reasonably required

recklessly disregarding these responsibilities should be made a criminal offence - including a possible prison sentence

senior bankers - and anyone in a position to cause the bank serious harm, such as top traders - should adhere to a new set of banking standards set by regulators

pay for bankers should be deferred for up to 10 years, with the ultimate payout linked to the long-term performance of the bank and of the employee's particular business area

deferred pay and pension rights should also be cancellable if a banker misbehaves, or - in the case of senior managers - if the bank has to be bailed out

banks should be legally required to put financial safety ahead of shareholder interests

There's more good stuff in there if you read the article.

Personally I think that the 10 year bonus scheme might be a bit much, but, you could maybe defer bonuses to be paid over 5 years with the accumulated bonuses reset if certain fiscal and ethical targets are not met every year.

It's a good start anyway. Anyone in a position to directly and negatively affect the wider economy or society should have to play by different rules. Since accountability is required to ensure any standard of performance, direct and personal accountability to the people and the government must be enforced eventually.

The same standards should be set for civil or public sector executive and upper management in all areas, IMO. It's too easy to shirk responsibility for €500m overrun in HSE budget, for example, so a ministers' directive effectively means nothing to the guys who are actually at the wheel, all the while blissfully trudging the wider PS though an innovation wasteland.

You could also argue that any other private sector business that handles government contracts on a large scale should also have the same standards applied to them. Maybe when any company reaches a certain threshold of government funds the standards are automatically applied to all directors.

I hope our government are watching very closely anyway. Accountability or the total lack thereof is the #1 reason we were left in this mess.

listermint

The Clown Man wrote: »

I hope our government are watching very closely anyway. Accountability or the total lack thereof is the #1 reason we were left in this mess.

Wouldnt matter an ounce if they were watching or not, im sure they arent. Because there is not one person in office that has the political will or power to introduce anything innovative in this country at all.

short of signing away blarney stone copyright legislation to suit big business thats about as innovative as you get.

The last good thing to come out of this country was the smoking ban.

The Clown Man

listermint wrote: »

Wouldnt matter an ounce if they were watching or not, im sure they arent. Because there is not one person in office that has the political will or power to introduce anything innovative in this country at all.

Well if there was any will within cabinet to actually solve the problem in the long term, it's an awful lot easier to follow the pack than to innovate.

If the UK are leading the way on this maybe we could take their lead, or even better, muster up some pressure from the UK to follow suit.