U.K. Chancellor of the Exchequer George Osborne backed tougher rules for the banking industry, including legislation to jail reckless bankers and giving regulators the power to defer bonuses for as long as 10 years.
Bloomberg News reports that in its response to the recommendations of the Parliamentary Commission on Banking Standards, the government said Monday it plans to implement the main findings, with new laws if needed.
'The government is determined to raise standards across the banking industry to create a stronger and safer banking system', Osborne said in a statement. 'Cultural reform in the banking sector marks the next step in the government’s plan to move the whole sector from rescue to recovery and ensure that U.K. banks demonstrate the highest standards, and are able to support business and drive economic growth'.
Pay reform is part of a program of sweeping change proposed by the commission, a cross-party group of lawmakers set up last year by Osborne after a series of scandals and five years of poor returns for the financial industry. The recommendations being adopted go further than changes introduced by U.K. regulators after the financial crisis, which forced bankers to wait as long as five years to get their bonuses.
Osborne plans to introduce legislation later this year that would make 'reckless' management of lenders a crime, meaning executives of failed firms could face jail time.
Hit the link below to access the complete Bloomberg article: