10 Sep 2019
Britain’s new system of banker accountability has led to a “tangible” improvement in culture but modest changes are still needed, UK Finance said on Tuesday.
The trade body for banks in Britain published the sector’s first major appraisal of the senior managers and certification regime (SMCR) introduced in 2016 as part of reforms implemented after the 2007-09 financial crisis that left taxpayers to bail out lenders while few individual bankers faced punishment.
SMCR makes it easier for regulators to pinpoint blame when things go wrong.
Barclays Chief Executive Jes Staley was the first to be punished under the regime when he was fined a combined 1.1 million pounds ($1.4 million) last year for trying to identify a whistleblower who had sent letters criticizing an employee of the bank.
UK Finance said the report – compiled with law firm Ashurst and based on a survey of 60 senior managers across 25 banking institutions – showed that banks are now more cautious about taking risks and are committed to implementing SMCR.
“Our report shows that since the introduction of the SMCR there has been a meaningful and tangible change in culture, behavior and attitudes towards risk,” UK Finance said.
“It is clear that the SMCR has focused senior managers’ minds in terms of individual responsibility, but there is less evidence that others within firms have a similar focus.”
The Financial Conduct Authority has said that measurement of improvements in culture is still in its infancy.
Britain was first to implement such a system, raising concerns among banks that regulators wanted “heads on sticks”.
But Tuesday’s report found that banks could still attract staff and that lenders have benefited from a clearer view of roles and responsibilities, UK Finance said.
By Huw Jones, Reuters, 9 September 2019
Read more at Reuters
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