It's a thumbs up from the City: Over half of bankers think the Senior Managers' Regime was a good idea

 
Hayley Kirton
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Just 15 per cent believe the rules have had a negative impact on the industry (Source: Getty)

Bankers have given their blessing to a recently introduced set of rules designed to increase personal accountability, the next tranche of which is due to take effect tomorrow.

Over half (55 per cent) of nearly 200 senior finance execs polled by Duff & Phelps think the Senior Managers' and Certification Regime, which first came into force last March, has had a positive impact on the banking and alternative investment communities.

On the other hand, only 15 per cent believe the new rules have had a negative impact.

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The latest red tape has also led to bankers giving more kudos to their colleagues in compliance.

"We have seen the regime start to change the way compliance departments budget," said Monique Melis, managing director and service line head, regulatory consulting, at Duff & Phelps. "They are not just counting compliance costs, but the costs of hiring a replacement compliance officer or interim staff, for regulatory penalties and remediation in cases of failure, and for their own personal liability if things go wrong.

"In short, this regime may have been a game-changer after all. Almost a decade after the financial crisis, cultural change in financial services is finally starting to happen."

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The next batch of bankers is due to be brought within the rules tomorrow.

Under the Certification Regime, banks have been required to identify workers who could pose "significant harm" to their clients or the firm itself. Those staff will need to be issued with a certificate, which must be updated yearly, from their firm stating they are "fit and proper" to carry out their role.

Tomorrow will also mark the first anniversary of the date the Senior Managers' Regime, which concentrates on staff holding critical roles at the firms affected by the rules, came into force.

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The scheme is overseen by the Financial Conduct Authority (FCA), whose chief exec, Andrew Bailey, has previously said he hopes the regime could prevent a repeat of the 2008 financial crisis by holding more bankers to account for their actions.

"I hope that it would have contributed significantly to creating an environment where people say: 'I won't do the sorts of things that I did do, because I know much more clearly now what the consequences of those actions would be,'" he said last year in an interview with ITV News at Ten.

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