Hector Sants warns rate-fixing scandal might happen again

Tim Wallace
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REGULATORS can never have sufficient resources to monitor every bit of banks’ behaviour, and so the Libor crisis could easily happen again, former Financial Services Authority chief Hector Sants warned yesterday.

The former top regulator told the Parliamentary Commission on Banking Standards only radical changes throughout banks could prevent a repeat of the scandal.

“Unless firms put in radically different culture, incentives and behaviours, and better controls there is a very high risk this will come back round again,” Sants told the MPs and peers.

He noted regulatory action against individuals are more often challenged than those against firms, taking far more time and resources from the regulator.

As a result “one of the reforms that needs to be made to the system is to enable regulators to take more efficient action against individuals,” he said.

And he noted “powers over foreign entities working in the UK would be helpful” to clarify the FSA’s capabilities.