Partner Article

Bankers made accountable as SMR is implemented

Haydn Lightfoot, Associate Partner at financial services consultancy Crossbridge, gives his view on the Senior Managers Regime (SMR).

“Senior bankers may feel under a greater degree of pressure as the Senior Managers Regime (SMR) is enforced; however it could be questioned whether the severity of this pressure has been exaggerated”, he said.

“Following the removal of the ‘reverse burden of proof’ clause, regulators will only be able to take action if they can show that an individual failed to take reasonable steps to prevent a regulatory breach from occurring. This could be difficult to prove, and it may be that a senior manager is only found to be in breach of SMR when a lack of these ‘reasonable steps’ allows a major issue to occur.

“Furthermore, recent reports suggest there is some uncertainty as to whether SMR will be applicable to senior bankers running Global businesses or just those focussed on European business operations.

“In order to improve culpability in the financial sector, banks need to maintain a minimum standard of compliance. As such, it could be argued that establishing an industry-wide set of benchmarks which financial organisations can be assessed against would provide real clarity and, alongside the SMR, help the regulators rebuild public trust in our banks.”

This was posted in Bdaily's Members' News section by Crossbridge .