In his Ten-Minute Rule motion on Wednesday after Prime Minister’s Questions, Mr Baker sought to seek leave to introduce a bill to improve the governance of banks by adjusting directors’ and employees’ exposure to risk: the Financial Institutions (Reform) Bill. The purpose of the Bill is to implement a series of mutually-reinforcing measures to resolve the financial crisis and minimise the chance of a future crisis. It is intended to:
- Preserve and extend commercial freedom,
- Promote personal, professional and mutual responsibility,
- Facilitate enterprise under the rule of law, avoiding excessive intervention by regulators,
- Deliver justice, so that those who stand to gain bear the risks of failure.
The fundamental principle is to make bankers liable for their own actions, so reining-in rampant moral hazards and excessive risk-taking. These measures would restore the integrity of the financial system and provide a sound basis on which the UK could continue to lead the world in financial services.
