New rules designed to hold individuals to account for banking failures have seen top HSBC boss Alan Thomson resign – and other senior figures, including John Trueman, are threatening to follow.
Under the regulations, bankers will have to prove themselves innocent of wrongdoing when their bank collapses, demonstrating that they took action to mitigate risk – with the threat of a prison sentence if they cannot. Objectors in the banking and legal sectors say that this unfairly reverses the burden of proof and will put the best brains off banking.
“It is one of several things putting people off joining bank boards,” a senior banker reportedly told CityAM. “You have to have a readiness for personal risk that is unmatched in other sectors. Over time, it will dilute the quality of bank boards, which is the opposite of what is needed.”
However, advocates of the new rules say that they are necessary to stop unscrupulous bankers hiding behind a system instead of taking responsibility.
“The crisis showed that there must be much greater individual responsibility in banking,” said Andrew Tyrie MP, who chaired the Parliamentary Commission on Banking Standards. “A buck that does not stop with an individual often stops nowhere.”
HSBC chairman Douglas Flint has previously warned that a “growing danger of disproportionate risk-aversion” is harming profits and growth in the banking sector.
The central bank has tweaked its stimulus programme and is making a fresh effort to push Japan’s inflation rate above its 2% target.
By 2020 global government spending will reach US$35 trillion against US$28 trillion in 2015, according to business information group MarketLine.
The study assesses the social and economic health of 30 of the world’s leading business centres.
A consultation paper proposes large financial penalties for accountants, lawyers and consultants whose aggressive tax avoidance schemes are defeated in court.