Reckless bankers to face possible prosecution
As of 7 March 2016, senior managers in UK banks, building societies or Prudential Regulation Authority (PRA) designated investment firms can face up to 7 years in jail and / or unlimited fines if their conduct is found to have caused the institution to fail.
The offence is triggered if he or she agrees to the taking of a decision which causes the institution to fail and, at the time of the decision, he or she was aware of the risk that the decision could cause the institution to fail and his or her conduct in relation to the decision fell far below what could reasonably be expected of a senior manager in that position.
In reality, the chances of a conviction are somewhat remote given the onus on the Crown to prove this criminality beyond all reasonable doubt.
Gerard Forlin QC, of Cornerstone Barristers, comments: “I would be very surprised if anyone was ever convicted of this offence, but it may well act as a brake on reckless investment and behaviour by white knuckle rider bankers and employees craving an ever-increasing bonus.
“Further, interestingly, the test of the ‘decision falling far below what could reasonably be expected of a senior manager in that position’ emanates from the world of health and safety as it was originally debated by the select committee when considering the Corporate Manslaughter and Culpable Homicide Act 2007.”
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