The Parliamentary Commission on Banking Standards has published its 571-page final report "Changing banking for good" today with recommendations to raise standards in the banking sector.
The commission, in its report, recommended replacement of the approved persons regime with a senior persons regime so that senior individuals are fully accountable for their decisions.
The commission recommended jail for senior persons responsible for mismanagement of banks. It said a new licensing regime under the purview of Banking Standards Rules will bring the defaulting senior bank employees within its enforcement powers.
A new remuneration code to defer payment for 10 years and a new power for the regulator to cancel outstanding deferred remuneration of erring senior employees.
The report also said the British government needs to pursue options either for disposing of the Royal Bank of Scotland (RBS) by September.
Commenting on the report, Andrew Tyrie, chairman of the banking commission, said that it is not just bankers that need to change. The actions of regulators and Governments have contributed to the decline in standards.
“Governments need to get on with the job of implementing these reforms. Regulators and supervisors need rigorously to enforce them. We need better regulation: this may mean less, not more. And we need a better functioning and more competitive banking industry,” Tyrie added.
The banking commission was set up by the British chancellor of exchequer George Osborne in July 2012 in the wake of the LIBOR scandal.