Why a new regime? You will recall I'm sure. It's part of the fallout from the last banking crisis that the UK Parliament convened a parliamentary commission on banking standards. Took evidence from all sorts of areas and regulators, the Bank of England and from across the industry. The consensus was that the existing regime of the rules, as it applies to individuals and to senior managers in particular, would not fit the purpose.

There were various reasons for this, which I don't think we really need to get into, but a number of senior regulators, including the Director of Enforcement at that time, Tracy McDermott, gave evidence to the Commission along the lines of, "This is why we've not been more successful at holding senior managers and major financial institutions to account to the banking crisis, and it's because the rules that they currently apply, and in particular, the underlying approach to delineating responsibilities and accountability within, in particular, the most complex organizations with matrix management structures, etc., makes it very, very difficult to determine where the buck stops."

Essentially, Parliament mandated that the regulators needed to go away and create a new regime for senior managers and a broader regime for certification staff, which Simon Will come on to explain shortly in a bit more detail which would facilitate the process of delineating accountability and identifying individuals, for example, by reference to specific responsibility statements applying to the scope of responsibilities of senior managers, so that the regulators would always know who was responsible for a particular business line and a particular regulatory infraction within that part of the business.

That is essentially what the regime has been designed to achieve. Personal accountability, being key to in the views of the regulators and certainly the government being able to enforce personal accountability, being key to a changing culture and encouraging a better risk culture, in particular, within firms.

This webinar was co-hosted with Eversheds-Sutherland