THE Coalition will legislate to ensure reckless bank bosses can be jailed and bonuses clawed back, David Cameron has announced.
In the House of Commons the Prime Minister told MPs he accepted the key recommendations from the Banking Commission and promised to act on them.
The Commission, made up of MPs and peers and set up in the wake of the Libor-rigging scandal last year, called on the UK Government to hold senior bankers personally responsible for malpractice and introduce a new criminal offence for reckless management that carried a custodial sentence.
Its long-awaited final report suggested regulators receive the power to defer bonuses for 10 years in order to stamp out excessive pay.
Pressed by Labour leader Ed Miliband on if he supported the Commission's recommendations on bonuses and criminal penalties, Mr Cameron: "I support both of those measures.
"Obviously, we need to take time to read this excellent report but penalising, including criminal penalties against bankers who behave irresponsibly, I say yes.
"Also, making sure that banks who are in receipt of taxpayers' money that you can claw back ... bonuses, I say yes too."
Mr Cameron said ministers would be using the Banking Bill, which is going through Parliament, to implement the plans.
While Labour welcomed the report as a "radical blueprint for change", some of the recommendations were met with a lukewarm reaction in the City.
Gary Greenwood of Shore Capital Stockbrokers said: "We question whether the industry will be able to attract top talent, given the proposed restrictions on pay and risk of being sent to jail for getting the job wrong."
Financial Services Consumer Panel welcomed the Commission's report and said it was right bankers should have the same professional standards as doctors and solicitors.
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