THE INDEPENDENT, FINANCIAL TIMES (UK)
LONDON – Martin Wheatley, the newly appointed chief financial policeman to the UK vowed on Monday that there will be no stone unturned in bringing corrupt bankers to justice in the City- London’s financial hub.
Bad bankers warned: repent or go to jail ind.pn/QEdKg3
— The Independent (@Independent) October 1, 2012
As head of the newly created Financial Conduct Authority (FCA), Wheatley will hold the power to instigate raids on City offices and bring criminal prosecutions to those exploiting or manipulating the financial-services industry.
In an interview with the Independent on Monday, Wheatley proclaimed: “We will shine a light into a number of dark corners and we will have to take action depending on what we find.”
He has proposed U.S.-style prosecutions of senior executives, claiming that banks have, up until now, behaved in an unacceptable manner, which, if they were running a commercial enterprise, would ultimately lead to a dwindling customer base.
“If companies were operating in a way that was thinking about the long-term interests of their customers then you wouldn’t need a heavy-handed financial regulation,” Wheatley said.
Wheatley also said the regulator will force banks to assign personal responsibility to individuals, in order to avoid the blameless society that surrounded the financial industry in the “deep, dark period” in the years running up to the financial crisis of 2008.
This could be seen as a response to the amassed public anger at the fact no senior executives have been held accountable.
Wheatley published a report Friday on Libor (London Interbank Offered Rate) – the primary benchmark for short-term interest rates around the world – branding it a “broken system built on flawed incentives, incompetence and the pursuit of narrow interests that are to the detriment of markets, investors and ordinary people.”
The Financial Times’ editorial piece on Sunday suggested: “Mr. Wheatley wants to “cleanse the toxic brand of Libor.” His proposals are the best way of doing so.
“But beyond rebranding, regulators must aim to make interbank lending itself more transparent and market-based – and to nudge the issuers of derivatives and other transactions towards using other benchmarks altogether.”
