Britain's most senior banking regulator has questioned why none of the bosses of the country's failed banks have been formally charged over their roles in the financial crisis.
Andrew Bailey, head of the new banking regulator, the Prudential Regulation Authority, said: "It is more than odd that action has been taken against people lower down in institutions, but no action has been taken at the top."
At a conference debating how to rebuild trust in Britain's scandal-hit banks, Bailey said it was a "source of surprise" that no senior bank directors have been disqualified. He pointed out that the secretary of state sought the disqualification of Barings Bank for their roles in failing to adequately supervise Nick Leeson.
Chuka Umunna, the shadow business secretary, said bankers caught trying to play the system in order to line their own pockets should be "thrown into jail".
He said it "cannot be right" that benefit cheats who fiddle the system for a couple of hundred pounds are thrown into jail while "those who seek to rig the financial system and receive hundreds of thousands of pounds as a result never seem to suffer the same fate".
In an impassioned speech at the Future of Financial Services summit in Canary Wharf on Monday, Umunna said the City would not be able to rebuild trust with society "until custodial sentences are imposed on those guilty of criminal wrongdoing in your sector".
He said the "prospect of jail for gross wrongdoing" was one of the best ways to affect cultural change in Britain's scandal-hit banks.
No bankers have been jailed in connection with the Libor rate-fixing scandal, but the Serious Fraud Office (SFO) has launched a criminal investigation and arrested three men. In the US, two former UBS employees have been charged.
Umunna acknowledged that politicians were hardly in the best position to lecture others on trust and morals. "We are less popular than you and we learned the hard way after the expenses scandal, when we had to get our house in order," he said. "But at least the people saw politicians brought to book – with some of our number serving jail time for their wrongdoing."
He also attacked Barclays for trying to sneak out news that it paid its bosses bonuses of £39.5m on budget day. Umunna said it "sent all the wrong messages".
Ashok Vaswani, boss of retail and business banking at Barclays, who was also at the debate, admitted that the timing of the release was "a mistake".
Labour will on Tuesday resume its push for changes to banking reforms going through parliament, calling for stronger immunities for whistleblowers.
In Tuesday's parliamentary debate, Labour will table amendments to the bill to protect whistlebowers as well bolster protection for customers of savings schemes such as Farepak, which collapsed in 2006.
Labour will also produced figures showing that the government's levy on balance sheets has brought in £2bn of revenue less than originally forecast.
Chris Leslie, a shadow Treasury minister, also intends to call for a full licensing review of bankers. "If a GP or a barrister was involved in serious misconduct, they would have to answer to the BMA or Bar Council ethical practice committees and could lose their licence – and so we also need similar processes for those who break financial regulations too," Leslie said.
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