U.K. FCA Warns Banks Against Undermining Accountability Rulesby
Says that obscuring banker responsibilities won’t be tolerated
Comments come six months after senior managers regime started
The U.K. Financial Conduct Authority warned banks it won’t tolerate attempts to undermine accountability rules introduced this year, as the agency considers extending the regulations to include more non-executive directors.
The comments target firms that try to protect senior managers and other decision makers by overlapping responsibilities among junior staff, the regulator said Wednesday, as part of a six-month review of its senior managers’ and certification regime. The FCA is also consulting on extending the conduct regulations to all non-executive director posts, beyond the few key roles now covered.
The regulator introduced the certification program in March to try to force firms to take more responsibility. The FCA handed firms the burden of approving employees as fit and proper to work in the industry and requires banks to map out clearly who and what senior individuals are accountable for. It’s also reviewing how senior lawyers in firms should be treated.
“Six months on and, in a great many cases, firms have made a substantial effort to get this right and embrace the importance of the key principles underlying" the regime, Andrew Bailey, chief executive officer of the FCA, said in a statement. "But we recognize culture change takes time and there is still more to do. So we have to keep a watchful eye on the progress firms are making.”
The new rules follow several scandals, including the manipulation of key benchmark rates. While the FCA levied a number of large penalties against firms, it was criticized for not holding senior bank officials responsible.