Andrew Bailey makes an unlikely witch-finder general


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The Independent Online

Outlook The Bank of England’s deputy governor Andrew Bailey has once again found himself cast in the role of the man who is destroying banking in Britain. The industry’s witch-finder general is now such a figure of fear, his regime of guilty until proven innocent so harsh, that even the promise of multimillion-pound salary, share and bonus packages aren’t enough to persuade people to take top jobs.

And yet he’s still plunging daggers into the heart of this poor industry. The latest? A suggestion that boards take some responsibility for the conduct of the staff they are supposed to oversee. That the specific accountability allocated to bosses under the Bank’s senior managers regime is complemented by the collective responsibility of boards. That they set out some of those responsibilities and ensure people stick to them, while aligning remuneration with prudence and ensuring their businesses are run on sound and ethical principles that staff buy into.

As long as they are able to show they have done their best to ensure this is so, there should be little enough for them to worry about. Mr Bailey’s proposals are all based on simple common sense and governed by the principles on which any well-run business ought to operate, including systemically significant, deposit-taking institutions that are underwritten by the state.

One does rather wonder why they need to be stated at all. Even the Institute of Directors likes them.

So the industry’s response – my spies tell me he was peppered with questions and moans about the senior managers regime when outlining them before an audience of building society executives – is telling.