In a final report published yesterday, the Government listed recommendations to be implemented by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which aim to strengthen Britain’s banking system by ensuring decisions are fair and transparent.
The 39 recommendations relate to the full procedure for investigating individual enforcement cases, and include making it quicker and easier for individuals to access the independent judicial system directly, conducting regular independent reviews of the regulators’ settlement processes, and introducing measures to ensure the authority’s decision makers are scrutinised and held accountable.
The report suggests encouraging “more constructive communication” between investigators and those being investigated, while more information should be published pinpointing the criteria for why an investigation has started in order to prevent “a sense of arbitrariness or unfairness” about which cases the FCA selects for investigation.
“Alongside this, firms and individuals should be expected and encouraged to admit wrongdoing at an early stage, [with] discounted financial penalties only being available within the initial settlement window.”
Chancellor George Osborne said: “Firms and individuals in the financial industry [should] conduct themselves to the highest standards.
“That is why we introduced a series of radical reforms to the banking sector, including giving [the FCA] stronger powers to protect customers and the stability and integrity of financial markets on which they depend.
“[These] recommendations will enhance the FCA and PRA’s capacity to deal with misconduct or tackle threats to financial stability swiftly, fairly and robustly.”
The Government also suggested the way the FCA and PRA cooperate with each other should be more transparent.
In the last financial year, the FCA imposed fines totalling £425m, with some cases being referred to the Serious Fraud Office which investigated potential criminal misconduct.
Last month, FCA handed out record-breaking fines totalling £1.1bn to five banks for “unacceptable behaviour” in failing to manage risks in G10 spot foreign exchange trading.
Click here to read about firms from around the world which have recently been fined for misconduct.
