Over Third of Financial Services Chiefs Support Jailing Reckless Bankers
Over Third of Financial Services Chiefs Support Jailing Reckless BankersReuters

Over a third of global financial services professionals working in banks, asset management, and hedge funds are in favour of jailing reckless bankers after 35% voiced support for staff to be held criminally liable for their actions.

According to a Kinetic Partners survey, support for criminal sanctions spans across the globe, with the strongest backing coming from the UK where 34% of respondents say that making executives criminally responsible for the actions of employees within their firms would be good for the industry.

However in the US, only 27% are in favour of criminal liability for executives, compared with 29% of those who are against stricter laws.

In one of Asia's largest financial centres, Hong Kong, respondents' were more evenly divided with 36% saying that it would harm the industry, compared with 35% who are in favour.

"As politicians and regulators respond to continuing public anger over the financial crisis and subsequent scandals, the threat of jail terms for those at the top of today's financial services firms is increasingly real," said Monique Melis, Kinetic Partners Global Head of Regulatory Consulting.

"The fact that more than a quarter of C-suite executives actively welcome such moves should give some confidence that the industry recognises that a culture of compliance needs to start at the top."

Kinetic Partners surveyed more than 300 senior executives in banks, asset managers and hedge funds globally for its 2014 Global Regulatory Outlook report.

A C-Suite executive is industry slang for a corporation's most important senior employees. More than a quarter of those in the C-suite support criminal charges for reckless bankers.

Regulators around the world have come under greater pressure to punish financiers with criminal charges in the face of a number of global banking scandals.

In June 2013, the UK's Parliamentary Commission on Banking Standards called for a new criminal offence to punish bankers with possible prison terms for 'reckless misconduct' while Hong Kong regulator the Securities and Futures Commission (SFC) recently pressed for prosecution of market manipulation in higher courts so tougher sentences could be imposed.

"Executives face significant responsibilities and trends such as the fight against tax evasion, illustrated by Foreign Account Tax Compliance Act and similar rules, on top of anti-money laundering and anti-bribery legislation, illustrate a global convergence in approach by regulators and governments," said Nick Matthews, Global Head of Forensic Services at Kinetic Partners.

"With an increasing appetite on the part of the regulators for fines and criminal prosecutions of individuals, general counsel, chief compliance offices and others in key positions, firms should need no encouragement to proactively ensure compliance."