Jun.19 - Lawmakers in Britain are calling for new laws to make it possible to jail ''reckless'' bankers and claw back past bonus and pension awards. Hayley Platt looks at the implications for the financial industry.
He was once the bad boy of British banking. And former RBS boss Fred Goodwin may have faced jail under new proposals by UK lawmakers. He was heavily criticised for his role in the near collapse of RBS in 2008. Five years on the UK's Parliamentary Commission on Banking Standards has drawn up new rules to clean up banking. Andrew Tyrie is its Chairman. SOUNDBITE: Andrew Tyrie, MP & Chairman of the Commission, saying (English): "What we've had up until now is a heap of incentives encouraging poor standards and excessive risk taking and we've all ended up paying the price, that's got to stop." The Commission is recommending a new criminal offence of "reckless misconduct in the management of a bank" which can result in jail. On pay, it wants a new code to better balance risk and reward - with more pay deferred. And it wants the regulator to be able to cancel all bonuses and pension rights to senior executives if their bank ends up needing a taxpayer bailout. Prime Minister David Cameron promised to look at the report carefully. But London's city workers were concerned. SOUNDBITE: Unidentified female banker, saying (English): "I am a banker so I don't agree with it, but I have to get to work." SOUNDBITE: Unidentified male banker, saying (English): "We do work very hard and I think the bankers do deserve it." Some banks have been trying to reform themselves since the Libor scandal was exposed last summer. Barclays was fined £290 million for the rate-rigging and the public was outraged. But banking analyst Simon Maughan says the UK government needs to be careful. SOUNDBITE: Simon Maughan, Banking Analyst, Olive Tree Financial, saying (English): "It's going to have two obvious impacts, one it's going to reduce the number of people that want to work as bankers and two it's going to make institutions far, far more conservative in what they do." The finance ministry will make a formal response to the recommendations next month. But some critics suggest enforcing any new regulations could prove tricky as one banker's risky gamble is another one's safe bet.