Minouche Shafik, deputy governor of the Bank of England (BoE), said today that more could be done to punish traders who attempt to manipulate financial markets.
Her suggestion was made during a speech at LSE – the first she has given since being appointed deputy governor.
During it, she focussed on the results of a consultation called Making Markets Fair and Effective, which was conducted by the BoE in conjunction with the Financial Conduct Authority (FCA) and the Treasury. The aim was to try and restore the reputations of other UK-based financial markets.
It was called by chancellor George Osborne in light of the Libor scandal, a review of which looked into banks' manipulation of the inter-bank lending rate and resulted in banks being fined £4bn.
"The risk is that, as memories of recent enforcement cases fade, bad practices may re-emerge," Shafik said. "Some say that may already be happening.”
"The review also wants to consider whether more needs to be done to monitor for, and where it is found, punish misconduct," she continued.
If Shafik's suggestions are implemented, they would be additional to laws already being introduced by the government as part of the Financial Services Act 2013. Under these new laws, senior bank managers could be sent to prison if their conduct leads to the failure of a bank.