Britain has announced plans to crack down on illegal financial practices following a series of banking scandals. Mark Carney, the governor of the Bank of England, said that this will mark the end of “the age of irresponsibility.”
As explain in this Australian Forex trading website that Insider trading penalties will now be extended to markets such as commodities, currency, and fixed-income and offenders will be sentenced to up to 10 years in prison. The changes will no longer permit the re-employment of individuals fired from financial companies until and unless the new employer conducts a thorough background check. Senior employees will be held accountable for the actions of their team members although they will not be held responsible as bankers are.
Mark Carney said that new laws related to accountability will be extended to all the banking executives of the Bank of England, which was involved in a Forex scandal in 2014. At an annual speech delivered at a meeting of finance leaders in London, he said:
“Not markets where transactions occur in chat rooms. Not markets where no one appears accountable for anything.”
George Osborne, the finance minister of Britain, had ordered the Fair and Effective Markets Review (FEMR) in 2014 in a bid to correct Forex laws after huge fines were imposed on British banks in 2013 for attempting to rig the Libor or the London Interbank Offered Rate. The same banks were again fined for attempting to manipulate the forex market, which is worth $5 trillion per day. Osborne said:
“Individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are—and they will be.”
The Financial Conduct Authority (FCA), the Bank of England, and the finance ministry had prepared the review, which came up to 100 games.
Britain already had laws prohibiting the manipulation of eight financial markets, and the British Bankers’ Association is happy that these laws have been expanded to include non-banking institutions.
Opining that the changes are not as far-reaching as expected, regulatory attorney Rob Moulton says that they could be the first steps toward better enforcement on the part of the FCA. He said:
“Criminalizing what has already been earmarked as unacceptable market practice is not a game changer. It does however increase the pressure on the UK regulator to take its first scalp.”
The creation of Market Standards Board to encourage better market practices has met with mixed reactions, but tougher rules will be created if firms fail to follow its recommendations.