Where the Buck Stops – Senior Management Responsibility High on FSA Agenda Gives Asian Bank Bosses Food for Thought

As published in China Staff  journal November 2012

2012 has been a year of high profile actions by the UK Financial Services Authority (FSA) against senior managers for system and control failings of financial firms.  It is also a year of many "first time" landmark penalties focusing on senior management behaviour that was previously under the radar of regulatory enforcement. 

For example, on 1 October 2010, the FSA imposed a £100,000 fine on an employee of a Swiss bank, which marks the first time an individual has been fined by the FSA not for any personal wrongdoing, but for failing to do more to control the conduct of others.  On 12 September 2012, the FSA banned former boss of a British bank from holding any senior position in a UK financial institution and fined him £500,000, the largest fine the FSA has ever levied against a senior executive, essentially holding him personally responsible for the alleged high risk strategies that led to a multi-billion pound bailout of the bank and subsequent takeover by another financial institution.

Senior management in financial firms based in Asia should be concerned about these developments. The long arm of the FSA has recently targeted not only foreign firms based in the UK, but may also extend its regulatory gaze to decision-makers based in FSA-regulated financial firms in Asia.

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