HSBC directors to quit over jail threat to bankers
Two directors of HSBC’s UK bank are poised to resign in a protest against new rules that could see senior bankers jailed if their institution fails.
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The rules, to be imposed by the Bank of England, have been drafted to stop reckless banking but critics say their introduction could see more directors walk out in the coming months.
According to reports, Alan Thomson, who sits on HSBC’s audit and risk committees, has already submitted his resignation and will stand down in January. John Trueman, the UK bank’s deputy chairman, also plans to resign soon, Sky News reports.
Both departures are said to be in protest over the new regulations, which make bankers more accountable, in the wake of a series of scandals in the sector and the collapse of Royal Bank of Scotland and HBOS.
Proposed by the Prudential Regulation Authority (PRA) in the summer, the rules would allow senior bankers to be jailed for up to seven years for serious misconduct.
Directors and other executives would be given new responsibilities and, in the case of criminal activity or a bank’s collapse, would have to prove they were unaware of or had attempted to stop misconduct at the time.
This reversal of the burden of proof has proved particularly controversial. Critics say the regulation is excessive, with no comparable rules in existence elsewhere, but supporters stand by the proposals.
“The [financial] crisis showed that there must be much greater individual responsibility in banking,” said Andrew Tyrie, who chaired the parliamentary commission that recommended the firmer rules.
“A buck that does not stop with an individual often stops nowhere. The new senior managers regime will require banks to identify who is responsible for what at the very top. Implementation will require banks and regulators to exercise their judgment.”
The revelation follows the first guilty plea from a British banker on charges relating to the manipulation of the Libor rate. On Friday the banker, who cannot be named, admitted to trying to rig the interbank lending rate.
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