LONDON (Reuters) - Britain’s top market regulations enforcer said on Tuesday her agency would pursue relentlessly individuals who break rules such as rigging Libor interest rates, and that fines were not punishment enough.
Regulatory efforts to pin down who is responsible for what inside a firm is something the sector should also expect more of in coming months, she said.
“We are serious about holding individuals to account. Many question if we have the ability to see this through ... we mean business and we are able to follow through,” Tracey McDermott, director of enforcement at the Financial Conduct Authority (FCA), told delegates at a ThomsonReuters customer event.
“Fines alone are not enough. We have to do something different. Senior managers must be held to account,” she said.
A global investigation that started in 2009 into the manipulation of Libor, a benchmark rate that affects hundreds of trillions of dollars of loans, has so far seen only three banks fined: Barclays, UBS and RBS.
Britain’s Serious Fraud Office charged former UBS trader Tom Hayes with eight counts of conspiracy to defraud on Tuesday in a criminal case. He and another trader, Roger Darin, are the only individuals to have been charged in relation to the scandal.
The burden of proof is lower for a civil case than for a criminal case as it is based on balance of probability rather than proving guilt beyond reasonable doubt.
Penalties for a civil conviction in a financial industry case range from a warning to a ban from the industry or a fine. In 2011 one individual was fined more than $10 million (6.4 million pounds).
Britain’s parliamentary Banking Commission reports on Wednesday how to improve standards after the Libor and other recent financial scandals. Parliamentarians in the group have said changes were needed to make top management directly accountable.
Reporting by Huw Jones; Editing by Louise Ireland