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UK lawmaker wants senior bankers vetted under new rules
[LONDON] Financial regulators in Britain risk repeating past failures if they give existing senior bankers a free pass into a new accountability regime, an influential lawmaker said on Monday.
Britain's two main banking regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), are introducing a new "senior persons regime" that will make every major decision attributable to a named individual.
They have proposed "grandfathering" existing senior staff into the new framework, meaning senior bankers approved under existing rules would be exempt from background checks and simply have to provide information about their responsibilities.
Andrew Tyrie, chairman of parliament's Treasury Select Committee, said the existing regime was a "catastrophic failure", and urged the regulators to apply checks to all staff covered by the new rules.
Lawmakers are frustrated that few bankers have been held to account after the 2007-09 financial crisis that forced taxpayers to bail out several British lenders.
Tyrie said no key banker should be automatically enrolled into the new regime.
The "box-ticking, back-covering culture" must not be allowed to continue, he said in a letter to the heads of the two regulators made public on Monday.
"Grandfathering could increase that risk."
The FCA declined to comment and the PRA had no immediate comment. The regulators have not given details on how grandfathering would work in practice.
The Treasury has not set a start date for the new regime.