Sunday, 4 January 2015

The multi-billion dollar cost to shareholders of bad behaviour by bankers

The CCP Research Foundation data shows that rolling conduct costs and provisions for 12 of the most-fined banks in 2009 to 2013 were £166.63bn ($261bn), compared with £154.96bn for 2008 to 2012. Shareholders are understandably starting to complain that they are paying the price for misconduct by executives, often of banks that no longer exist but have instead been taken over. Regulators have some sympathy with this argument, and the UK began consultations in July 2014 on a new senior managers’ regime, which would require executives to certify that they had done everything possible to prevent illegal activity in their bank. Bonuses would be subject to seven-year clawback provisions in the event of misconduct or heavy losses emerging in the bank. The response from the City was very critical ...
The CCP Research Foundation data shows that rolling conduct costs and provisions for 12 of the most-fined banks in 2009 to 2013 were £166.63bn ($261bn), compared with £154.96bn for 2008 to 2012. Shareholders are understandably starting to complain that they are paying the price for misconduct by executives, often of banks that no longer exist but have instead been taken over. Regulators have some sympathy with this argument, and the UK began consultations in July 2014 on a new senior managers’ regime, which would require executives to certify that they had done everything possible to prevent illegal activity in their bank. Bonuses would be subject to seven-year clawback provisions in the event of misconduct or heavy losses emerging in the bank.
The response from the City was very critical …
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