Regulator: Major banks too big to prosecute

14 December 2012

Britain's largest banks have reached a situation where they are too big to be prosecuted, a senior regulator has admitted.

Andrew Bailey, chief executive designate of the Prudential Regulation Authority, believes bodies cannot realistically take legal action against major financiers because of the impact this would have on market confidence in the organizations.

During an interview with the Daily Telegraph, Mr Bailey explained that filing criminal charges against a large institution brings with it some "very difficult questions" for regulatory professionals.

"It would be a very destabilizing issue. It's another version of too important to fail," he noted.

Several major banks have been embroiled in illegality this year, with Barclays accepting fines of around $450 million for its involvement in the Libor manipulation scandal in the summer.

Indeed, just earlier this week, HSBC was penalized to the tune of $1.9 billion for its breach of money laundering practices in the US.

However, Mr Bailey stated that such processes do not represent "ordinary criminal indictments" due to banks' importance to market confidence.

By Asim Shah

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