We may be on the brink of a new era in compliance – or at least in enforcement. This week the Bank of England Governor Mark Carney earned headlines around the world when he suggested that individuals’ base pay as well as their bonuses could be at risk if they failed to act properly. And he was not alone as other regulators and policymakers publicly voiced whether the current regulatory curbs were actually succeeding in improving behaviors in financial services.
We know that financial fines are getting bigger. In 2013, the UK regulator issued fines some 18 times greater than its predecessor had in 2008 – but that is by no means the whole story. Our survey on the rising costs of non-compliance – published this week – highlights the increased focus among regulators on greater accountability and personal liability for the individuals involved in compliance breaches. Enforcement cases now routinely see the departure of senior executives and the clawing back of any recent bonuses. In market abuse cases individuals rightly face prison sentences.
The pressure is on compliance departments, therefore, to keep their businesses – and their bosses – on the right side of their regulators, certainly, and where possible to future-proof their business activities by monitoring and anticipating the latest thinking among the world’s regulators. (more…)