LONDON (Reuters) - New rules making senior bankers in Britain accountable for their actions will be introduced soon and applied broadly to help quell public anger towards the sector, British financial services minister Andrea Leadsom said.
Leadsom wants to push ahead, having only a few weeks left in office before UK lawmakers go to the polls in May in what will be one of the most unpredictable elections in years.
Lawmakers called for the new rules, known as the senior persons regime, after few bankers were punished following taxpayer bailouts of UK lenders in the 2007-09 financial crisis.
Bankers’ job responsibilities would be explicitly laid out and any failure to meet them could lead to intervention by regulators.
“It’s imminent,” Leadsom said in an interview on Wednesday evening in parliament.
“My view is that I want it to happen as quickly as possible as I think a key part of rebuilding trust in banking has to be that... individuals within banks are seen to be accountable.”
Bankers warn the change will make recruitment harder, but Leadsom said the reform was not about “finding scapegoats” and should not be delayed because some don’t like accountability.
“It’s perfectly possible an individual might want to decide they don’t want to be in that role anymore and so we need to take that into account. It won’t be overnight,” Leadsom said, indicating transitional arrangements.
Britain’s regulators have indicated differing views on which bankers should come under the net.
“It’s essential for me that we make the scope broad and we bring it in as soon as possible. There is no doubt that there is still rage amongst the public about the fact that there is a sense the bankers brought the economy to its knees and got away with it,” said Leadsom, a former banker herself.
The government has also sought more competition in a sector where just five banks, Barclays, Lloyds, HSBC, RBS and Santander UK, handle 80 percent of high street deposits and loans to smaller companies, she said.
Several new banks have been set up with many more in the pipeline but Leadsom accepted that the “Big Five” market share looked “unassailable” and challengers would take time. Britain has also made it possible for high street customers to switch lenders within seven working days.
But more action may be needed, such as cutting the switching time to 5 days and extending this facility to small business accounts too, Leadsom said.
“Those things we are looking at, and it would be great if banks decided to do those things,” said the minister responsible for the City of London, Europe’s biggest financial centre.
Prior to becoming a government minister, Leadsom used her position as a lawmaker to push banks on “portability”, meaning a customer can switch banks but still keep their account number, like mobile phone users can.
Banks say this would be too costly and reap few benefits.
Regulators are due to give an opinion on portability this year and Leadsom said it was a “medium term project” that could have steps along the way.
A utility could be set up to make anti-money laundering and other checks on a customer before a bank would accept its account to ease the burden on banks themselves, she said.
Reporting by Huw Jones; Editing by Toby Chopra