British financial overseers are moving to roll back key accountability standards enacted after the 2008 financial crisis, aiming to reduce administrative loads on City firms.
Under proposals unveiled by the Bank of England and the Financial Conduct Authority (FCA) during a Mansion House dinner in London, annual checks will be narrowed. The adjustments will exempt roughly 140,000 managers from extra vetting, leaving only top executives like chief executives and chief financial officers required to prove annually, and before changing roles, that they are “fit and proper.” This will free about 140,000 staff from having to illustrate they are operating with “integrity” and following regulators’ conduct rules. According to the Bank of England and FCA, This would not mean bosses would get away with bad behaviour.
The adjustments also ease reporting requirements for minor employee workplace infractions. Financial firms will no longer need to report initial warnings or lower-level misconduct—such as tardiness or dropped customer calls—to regulators. Instead, watchdogs will focus on serious misconduct, final warnings, and terminations, though executive leadership must still be notified internally of initial incidents.
Originally introduced in the mid-2010s to address public backlash following the banking collapse, the senior managers regime was designed to hold decision-makers accountable and was later extended from banks to asset managers and hedge funds. The latest shift follows a government mandate directing regulators to foster global competitiveness, an initiative that previously resulted in scrapping the cap on banker bonuses. In response to widespread public anger over the 2008 banking crash, it would be a watering down of measures that came into force in the mid-2010s. The senior managers regime was meant to address the fact that few bank bosses were held to account for actions that contributed to the ensuing financial crisis. It is the latest set of City rules to have been scaled back since the government gave regulators a new objective: ensuring UK firms are competitive on the world stage. Which were previously limited to two times a banker’s salary, those efforts have already helped lift the cap on banker bonuses.
Regulators project that eliminating these administrative requirements will save industry firms roughly £2bn over ten years. Additionally, the measures are expected to lower annual operating expenses by £11.5m for the Bank of England and £229m for the FCA. According to the regulators, Removing these “unnecessary burdens” would save businesses about £2bn over 10 years while cutting the Bank of England’s and FCA’s costs by £11.5m and £229m each year, respectively.
Despite the changes, both institutions maintained in a joint statement that core ethics remain intact. They asserted that high standards of personal responsibility will be preserved, affirming their ongoing commitment to hold individuals accountable for wrongdoing that impacts employers or the public.
