London - Britain's financial watchdogs unveiled rules on Tuesday to help whistleblowers in the banking and insurance sectors as part of efforts to stamp out misconduct that has tarnished the industry.
They also made proposals to tighten up how banks and insurers obtain references on potential hires.
The 2007-2009 financial crisis prompted policymakers in Britain to call for a system that makes it easier for staff to raise any concerns internally.
The regulators also want to make it harder for bankers involved in misconduct to find a job with another bank.
The final rules on whistleblowing, which differ little from an earlier consultation, form part of broader efforts by the Financial Conduct Authority and the Bank of England's Prudential Regulation Authority to improving individual accountability in the financial sector.
Many lenders already have informal whistleblowing arrangements but the regulators wanted a formal, standardised approach.
“For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies,” Tracey McDermott, acting FCA chief executive. said in a statement.
“Mechanisms within firms to encourage people to voice concerns - by, for example, offering confidentiality to those speaking up - can provide comfort to whistleblowers,” McDermott said.
On the issue of references, the regulators published a consultation paper on introducing a mandatory template in March 2016 for banks and insurers to obtain references on people they want to hire. This is partly to address industry concerns over possible breaches of data privacy rules.
“In this consultation, we are proposing changes to the way firms seek and provide references for candidates of certain roles,” the FCA said.
The consultation follows recommendations made by regulators to raise standards in the fixed income, currency and commodity markets after banks were fined billions of pounds for trying to rig foreign exchange benchmarks.
REUTERS