Headline NewsBanking “mutiny” as HSBC bosses quit over threat of prison

Banking “mutiny” as HSBC bosses quit over threat of prison

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.

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.

 

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