Posted: 18th October 2014
When it comes to diagnosing the causes for the financial crisis, and the cause of mis-selling scandals such as Payment Protection Insurance (PPI), both the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) believe that behaviour and culture played a significant part. These regulators believe that holding individuals to account is a key component of effective regulation, however in their investigations of firms, individual accountability was considered to be unclear and confused.
The Parliamentary Commission on Banking Standards (PCBS), which was established in July 2012 in the wake of the LIBOR scandal to conduct an inquiry into professional standards and culture in the UK banking sector, observed similar findings; namely that a lack of personal responsibility has been commonplace throughout the industry, with senior figures continuing to shelter behind an accountability ‘firewall’.
On July 29, 2014, the FCA and the PRA published two joint consultation papers aimed at providing a framework which encourages individual responsibility and accountability as well as making it easier for firms and regulators to hold individuals to account.
We are currently engaging with firms, industry associations and regulators to better understand the proposed new rules and their implications for the industry. If you’d like to share your thoughts with us, we’d be delighted to hear from you.
Alternatively, you might like to take part in our survey. Huntswood, in association with YouGov, are undertaking an industry-wide online survey which all levels of management at affected firms are invited to participate in. Our findings, along with Huntswood’s own unique analysis will be published later this year, providing firms with the opportunity to observe thoughts from across the industry.
As conduct risk specialists, Huntswood continues to be in dialogue with the FCA across a number of conduct risk areas, including the improvement of individual accountability in the banking sector, and the output of this survey will be a key barometer of opinion across firms to add into those discussions.
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