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Reform is good for bankers. One far-off day they'll see it

Outlook

James Moore
Tuesday 07 July 2015 20:07 EDT
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They’ve probably heard the whingeing in Singapore, but now the new rules designed to ensure bankers take responsibility for their actions have finally been published. The City’s regulators have thrown the industry a bone or two – there’s a bit of give in the timetable to make things a bit easier for smaller institutions in particular – but that’s about it.

In future, if bankers go rogue – as they did with Libor, foreign exchange and one or two other trading desks – they will carry the can. And so will their managers if they fail to take steps to prevent misconduct. If misrule by senior executives leads their institutions off a cliff, they face jail.

The campaign against all this was always a bit pointless given that the framework had been agreed long ago by the Parliamentary Commission on Banking Standards. It was also rather silly. There is nothing to fear from the new set-up among those who do their jobs, for which they are richly rewarded, properly – as the regulators have been at pains to stress.

In the long term it will be to the industry’s benefit because it ought to demonstrate to a sceptical public that there will be no more “getting away with it” on the part of miscreants – something that has fuelled much of their resentment for the industry.

Believe it or not, some of the industry’s more progressive leaders realise this. Sadly, it may take a generation before they are in the ascendant.

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