Regulators want
reckless bankers to be criminally liable under new plans
The bosses of leading City firms are to be made more
accountable for their actions under proposals that could make them wait up to
seven years for their bonuses and potentially be jailed if their banks fail. Responding
to recommendations made by the parliamentary commission on banking standards,
the two main City regulators on Wednesday set out lengthy consultations aimed
at framing a new licencing regime for bankers and the creation of a
"potential criminal liability under a new offence relating to a reckless
decision causing a financial institution to fail". The Financial Conduct
Authority and the Bank of England's regulation arm, the Prudential Regulation
Authority, want the new regime to be in force by January next year and would
force bankers to prove they had acted appropriately – a reversal of the burden
of proof. Bankers would be subjected to annual checks to ensure they comply
with a regime which covers those involved in what is known as a
"significant harm function". But the regulators have stepped back
from the idea of the parliamentary commission – set up in the wake of the
Barclays' fine for rigging Libor two years ago – that bonuses be deferred for
as long as 10 years. "The PRA and FCA note that increasing the overall
length of deferral is not the only way in which the typical present pattern of
deferrals might be altered to improve risk alignment. There is scope to
increase the proportion of awards that are held for longer within the overall
deferral period, either by requiring a greater proportion of awards to be
deferred, or by delaying the start of vesting, which typically starts a year
following the initial award," the regulators said. Instead, for the most
senior bankers, bonuses must be deferred for seven years and for less senior
staff for five years, according to the consultation. And the new rules coming
into force will allow bonuses to be clawed back for up to 10 years. This would
force bankers to repay bonuses already received as well as having deferred
bonuses withheld. GUARDIAN
Energy firms to
'double' profit margins, predicts Ofgem
A year ago, Ofgem estimated that suppliers would make an
average profit of £53 per dual fuel customer, a margin of 4%. But in the year
ahead they now expect energy firms to make £106 per customer, increasing their
margin to 8%. The industry said the figures do not take tax or interest into
account. However Ofgem - which will officially publish the details on Thursday
- said it was further evidence that the market was not working as well as it
should. It has already referred the industry - and the profits it makes - to
the Competition and Markets Authority (CMA). It has also written to the
suppliers to ask why falls in wholesale prices last winter have not resulted in
lower bills. BBC NEWS
UBS and Deutsche Bank
questioned over 'dark pool' trading
Two more banks – UBS and Deutsche Bank – have been drawn in
to the controversy over "dark pools", the private trading systems
recently highlighted by bestselling author Michael Lewis in his latest book on
Wall Street. Dark pool exchanges are operated by banks and allow dealers to
remain anonymous until their trades are executed. Lewis argues they are used by
high frequency traders who try to make profits by trading faster than everyone
else. Barclays is already defending itself against accusations of fraud by the
New York attorney general over the way it advertised its dark pool. GUARDIAN
Nearly 2m working
adults still live at home with parents
A leading charity has called on politicians to stop pumping
money into loan schemes that ‘inflate’ house prices further and instead take
‘bolder action’ to build more affordable homes for a ‘clipped wing generation’
who cannot fly the nest. The plea comes from Shelter, which pointed to
exclusive Census data showing there were 1.97million young adults in England
who are still living with their parents despite working - this amounts to a
quarter of all those aged between 20 and 34 in employment. And a separate
survey of 250 young adults who live with mum and dad found nearly half of them are
not moving out because they cannot afford to rent or buy a home, Shelter added.
Campbell Robb, chief executive of Shelter, said: 'The “clipped wing generation”
are finding themselves with no choice but to remain living with mum and dad
well into adulthood, as they struggle to find a home of their own. And those
who aren’t lucky enough to have this option instead face a lifetime of
unstable, expensive private renting... From helping small local builders find
the finance they need, to investing in a new generation of part rent, part buy
homes, the solutions to our housing shortage are there for the taking.’ DAILY MAIL
