Bad bankers warned: repent or go to jail

Britain's top financial policeman promises criminal prosecutions in every 'dark corner of the City'

Britain's new chief financial policeman has issued a stark message to the City of London: "We have barely got started."

In an exclusive interview with The Independent, Martin Wheatley, the head of the new Financial Conduct Authority, warned that people who believe watchdogs are already too tough have "a big wake-up call coming".

Accusing bankers of avoiding responsibility for misconduct by hiding behind committee management, he raised the prospect of US-style prosecutions of senior executives: "In the future we want individuals held to account."

The FCA, which will replace the Financial Services Authority, will have the power to launch raids on City offices and bring criminal prosecutions. Mr Wheatley, pictured, who last week recommended that bankers who attempt to manipulate Libor face criminal prosecution, pledged to investigate and expose potential abuses in other sectors of the financial-services industry.

That could include the gold and silver markets, oil, foreign exchange and even agricultural commodities. "We will shine a light into a number of dark corners and we will have to take action depending on what we find," Mr Wheatley said.

The regulator also accused banks of mistreating their customers to an extent that would be unimaginable in other consumer businesses.

"The truth is that if our supermarkets in this country, if John Lewis, operated in a way that banks do, they wouldn't have any customers," he said. "If companies were operating in a way that was thinking about the long-term interests of their customers then you wouldn't need a heavy-handed financial regulation."

Mr Wheatley published his report into Libor interest rates on Friday which called for sweeping changes to the way they are calculated in the wake of attempts by traders at Barclays and other banks to fix them.

He said the roots of this and a string of other financial scandals came from "a deep, dark period" between 2005 and 2008.

"That was a horror period in terms of the way people were abused in their financial services. A lot of the things we are dealing with today – Libor, payment-protection insurance, interest-rates swaps – all of them go back to that period."

He attacked a mindset among banks that held that "you had to sell, you had to be earning by whatever means necessary" and pledged to force them to change their behaviour if they won't act themselves.

In addition to forcing changes to the way bankers are paid, Mr Wheatley also detailed how leaders will be held to account if banks fail in future.

This follows widespread public fury about the fact that no senior bankers have been prosecuted over the financial crisis and only two of the top bankers from the failed banks HBOS and Royal Bank of Scotland (RBS) were banned by the regulator: Johnny Cameron, from RBS, and Peter Cummings, from HBOS, who was also recently fined £500,000.

"If there are failures in the future we want individuals held to account," Mr Wheatley said, admitting that fining companies didn't work. "Ultimately the shareholders pay and it gets written off."

He will change this by forcing banks to assign personal responsibility for various functions to individual bankers.

Mr Wheatley said one of the chief reasons regulators have been prevented from acting in the past is because decisions are often taken by committee in banks, making it hard to assign blame.

"Society wants us not just to be ticking boxes, asking if people have been following the rules, but to be looking at outcomes and at what's going wrong and then taking action. That's what I've been brought in to do and that's what I will do."

He added: "Part of the industry appears to feel that it can abuse customer relationships time and time again without taking any impact from it."

Mr Wheatley gained a reputation as a hardliner in Hong Kong which has followed him to London and can be seen in last Friday's report into how to reform Libor interest rates, in which he had some hard words for the banking industry.

News
people'It can last and it's terrifying'
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
football
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
News
people Emma Watson addresses celebrity nude photo leak
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
footballFeaturing Bart Simpson
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Infrastructure Lead, (Trading, VCE, Converged, Hyper V)

£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...

Software Solution Technician - Peterborough - up to £21,000

£20000 - £21000 per annum + Training: Ashdown Group: Graduate Software Solutio...

Supply teachers needed- Worthing!

£100 - £120 per day: Randstad Education Crawley: Supply teachers needed for va...

Year 4 Teacher

Negotiable: Randstad Education Plymouth: Year 4 Primary Teachers needed Rand...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering