Banking authorities in the United Kingdom have proposed tighter regulations on lenders’ senior management on issues such as remuneration packages and accountability.
In two consultation papers jointly released by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), the watchdogs suggested a maximum seven-year imprisonment for bankers convicted of misconduct, Hong Kong Economic Journal reported Thursday.
Meanwhile, senior management could face bonuses being clawed back up to seven years after they have been awarded, under the new proposed rules.
The regulators also proposing lengthening the amount of time between a bonus being awarded and it actually being paid out, by extending to five to seven years from the previous three to five years, depending on the ranking of the executives.
The proposals are deemed to be the toughest among other financial regulators in major markets. The authorities are seeking to conclude and publish the new regulations early next year.
The suggestions in the consultation papers mark a significant change in regulators’ aim to hold senior banking executives accountable, and are in line with public expectations, said FCA chief executive Martin Wheatley, who had once served as the chief executive of Hong Kong’s Securities and Futures Commission.
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