New guidelines to raise standards in financial institutions coming

New guidelines are on the way to strengthen the accountability of senior managers and raise standards in financial institutions.

The moves, which should take effect in the fourth quarter, are part of efforts to foster a culture of ethical behaviour and responsible risk-taking. They mirror efforts worldwide to instil personal accountability at the top of firms, following the global financial crisis a decade ago.

The proposed guidelines include requiring financial institutions to identify senior managers who are responsible for core management functions and clearly specify their individual areas of accountability.

Institutions should ensure that senior managers are fit for their roles and hold them individually responsible for the actions of their staff and the conduct of business.

The proposals also call for a proper framework to be put in place that promotes and sustains the desired conduct among all employees.

There should be appropriate incentive systems and effective feedback channels, such as whistle-blowing mechanisms, available too.

Mr Warren Lim, chief executive of Finexis, welcomed the move: "It is a good initiative for MAS (Monetary Authority of Singapore) to give greater clarity, yet allowing the financial institution some autonomy to decide what level of risk to take. The penalties are also clear." - THE STRAITS TIMES