More than 140,000 finance executives will be removed from UK rules requiring annual "fit and proper" checks, marking the latest dilution of post-2008 banking regulations. The Senior Managers and Certification Regime, introduced by the Financial Conduct Authority and Prudential Regulation Authority a decade ago, will be significantly weakened. The reforms will halve the £400mn-a-year cost of the regulations by scrapping annual checks on 139,000 employees and cutting the number of senior manager appointments requiring prior approval by more than 40%. The total number of employees needing annual fit and proper checks will drop by two-thirds to about 74,000. The Bank of England said removing requirements to report minor conduct breaches will let companies focus on "more serious misconduct". UK policymakers have already eased ringfencing restrictions, relaxed mortgage limits, trimmed bank capital requirements and scrapped some bonus restrictions. However, regulators are considering tightening rules around AI due to cyber attack fears. Katharine Braddon, new head of the PRA, announced a new directorate focused on operational and cyber resilience. Nikhil Rathi, head of the FCA, warned of "unprecedented volatility, concentration risks, new forms of market abuse and rampant cross-border financial crime" amplified by fast-emerging technologies.
FAQ Q: What impact will the dilution of fit and proper rules have on bank accountability?
FAQ A: The changes remove annual checks on over 140,000 finance executives and reduce oversight of senior manager appointments, potentially weakening individual accountability for misconduct that affected society during the 2008 banking crisis.
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