UK bank execs warned failure may cost them

Sacked bank executives in the UK may lose all their deferred pay under rules proposed by the Parliamentary Commission on Banking Standards.

The commission has called for a "new power for the regulator to cancel all outstanding deferred remuneration, along with unvested pension rights and loss of office or change of control payments, for senior bank employees in the event of their banks needing taxpayer support."

The commission also wants a new criminal offence for senior bank staff engaged in "reckless misconduct in the management of a bank, carrying a custodial sentence."

Offering its views on the structure of the banking industry, the commission suggested there was "scope for disposing of any Royal Bank of Scotland 'good bank' as multiple entities rather than one large bank, to support the emergence of a more diverse and competitive retail banking market."