City regulators propose easing post-crisis accountability checks on managers
The Bank of England and Financial Conduct Authority plan to ease post-financial-crisis rules on accountability in the City. The proposals would reduce checks on managers and reporting of some lower-level misconduct, as regulators seek to cut what they describe as unnecessary burdens on firms.
Around 140,000 managers would no longer face enhanced checks; annual “fit and proper” assessments would focus on the most senior executives, such as chief executives and finance chiefs. Firms would report serious misconduct, final warnings and dismissals, while initial concerns would still be raised with senior leaders. Regulators estimate the changes would save businesses about £2bn over 10 years and reduce their own costs by £11.5m for the Bank and £229m for the FCA each year.
In short
- UK regulators propose easing accountability checks for City managers.
- About 140,000 staff would be freed from enhanced checks.
- Regulators estimate £2bn in business savings over 10 years.
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The case for
Supporters argue that focusing annual checks on the most senior executives and limiting formal reports to serious or concluded misconduct would cut costly bureaucracy while preserving oversight of the people and conduct that pose the greatest risks. They say the estimated savings could free firms and regulators to use resources more effectively, while initial concerns would still reach senior leaders.
The case against
Critics could argue that broader checks and reporting help firms identify patterns of poor conduct before they become serious, and make managers at every level answerable for their decisions. Narrowing those requirements may weaken early warning signals and transparency, potentially allowing problems to go unaddressed and undermining confidence in financial services.
Explained simply
After the 2008 financial crisis, UK regulators introduced rules to make senior people at banks and other financial firms more accountable for how their businesses are run. These include checks on whether managers are suitable for their roles and requirements for firms to report misconduct.
The Bank of England and the Financial Conduct Authority oversee different parts of the UK financial system. The rules affect firms such as banks and insurers, and the managers responsible for their decisions and conduct.
The debate is about balancing oversight of individuals with the time and cost of meeting regulatory requirements. The rules matter because they shape how firms identify and report misconduct, and how regulators assess responsibility when things go wrong.
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Originally published by The Guardian as “UK to relax post-2008 rules that hold City bosses accountable for wrongdoing”.