The Bank of England is considering more stringent regulation of financial companies, as scandals that undermine Britain's reputation as the world's financial center are not limited to a "few bad apples", said a senior bank official Monday night.
Addressing an audience at the London School of Economics and Political Science, Minouche Shafik, the deputy governor of the bank, said although much had been done to strengthen the financial system, there had been "a long tail of outrageous conduct cases."
"These are like salt rubbed into the wounds of public confidence in the financial markets. This is in no one's interest," she said.
The initial argument that it was just the case of "a few bad apples" is no longer credible, Shafik said. Instead, it seems that there were deep rooted problems in the fixed income, currency and commodity markets that resulted in practices that would be unacceptable elsewhere, she said.
According to a consultation paper issued last night by the bank, regulators are considering tougher penalties for staff who violate internal guidelines, more intrusive electronic surveillance of trading floors, and more established procedures for protecting whistle-blowers.
Shafik is overseeing the UK Fair and Effective Markets Review, a government initiative launched in June which aims to raise the standards of conduct in the financial system.