The Parliamentary Commission on Banking Standards has released its report on the British banking system. A year in the making, it is based on testimony from 250 witnesses and runs to almost 600 pages. Its review of the failings of the banking system in the credit crisis produced several recommendations, with the most eye-catching being jail sentences for reckless bankers, deferring bonuses for up to ten years and reclaiming pensions. It also examines ways to bolster competition between banks.
What the commentators said
Creating a new criminal offence reckless misconduct in the management of a bank' is "an excellent idea", said Nils Pratley in The Guardian. The threat of jail will be underpinned by practical changes to the way managers are held accountable. The key reason nobody at a bank has been prosecuted is that the top brass have been able to plead that responsibility had been delegated and decisions made jointly. The commission suggests making the chain of command much clearer and thus pinpointing who is responsible for what. "No more bleating that everybody was mis-selling payment protection insurance [PPI]. In future, if PPI was your responsibility, "your pension may evaporate".
But when it comes to apportioning blame for the credit crunch, reckless bankers are only half the story, said Iain Martin on Telegraph.co.uk. What about politicians who "cock up the regulatory structure and allow the inflation of a reckless private debt bubble"? Or chancellors "who inflate the next housing bubble with a reckless Help To Buy' scheme"? Are they covered by this new proposal? "Don't be daft."
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