The Government has published its response to the recommendations of the Parliamentary Commission on Banking Standards. As suggested in the Chancellor's Mansion House speech, it intends to implement the recommendations as soon as possible. In particular it will:

  • introduce a criminal offence for reckless misconduct for senior bankers;
  • set rules to ensure bankers’ pay is aligned with their performance, including provisions on bonus deferral and claw-back;
  • introduce stringent requirements on senior bank staff and new rules to promote higher standards for all bank staff;
  • reverse the burden of proof so bank bosses are accountable for breaches within their areas of responsibility;
  • strengthen corporate governance so firms can identify risks and maintain standards on ethics and culture;
  • give PRA a secondary competition objective to strengthen its role in ensuring the UK has banking markets with effective competition that delivers good outcomes for consumers; and
  • ask the new payments regulator to urgently examine account portability and whether the big banks should give up ownership of the payments systems.

(Source: Government Responds on Banking Standards)