Bosses of failed banks to be banned from City

4 July 2012

Directors of failed banks should not be able to hold positions in the City of London.

Proposals are being considered by the Treasury in an effort to stop these people getting more top-level positions with financial institutions.

Indeed, these individuals could even face jail time if they are found to have acted improperly.

A Treasury source told This Is Money: "It is vital that directors be held to account in the event of a bank failure. These would be among the toughest reforms of this kind in Europe."

Under the new rules, directors would have to prove to the Financial Services Authority that they acted responsibly, which represents a 180-degree shift from the current system.

It is an attempt by the government to firm up the rules regarding banking misconduct and comes after former chief executive officer of Royal Bank of Scotland Fred Goodwin was not prosecuted over his role in the collapse in the industry.

By Claire Archer

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