LONDON (Reuters) – Two directors of HSBC’s British business have expressed concerns about new rules that can result in jail sentences for senior bankers, but only one has resigned, and that was mainly due to extra demands on his time, the bank said.
HSBC Chairman Douglas Flint said in a letter publicly released on Monday that Alan Thomson had resigned from the board of HSBC Bank Plc on Sept. 4 and left at the end of October. Thomson had “some incremental concerns surrounding the application of the new senior manager’s regime to NEDs (non-executive directors)”, Flint said in a letter to Andrew Tyrie, the politician who chairs the Treasury Committee.
Media reports in October said Thomson had resigned and that John Trueman, the deputy chairman, was close to resigning.
Sky News reported that it was a direct consequence of proposals by the Bank of England to strengthen accountability for senior bankers, known as the Senior Persons Regime, which includes powers to jail bankers for reckless misconduct.
Tyrie had asked Flint whether the two directors had resigned and, if so, to clarify their reasons for doing so. Flint said Thomson’s grounds for resigning were mainly due to his work burden. Greater time is now demanded of non-executives from “expanded regulatory expectations”, and Thomson was due to become chairman of the UK arm’s audit committee, which would have taken up more time, the letter said.
As for Trueman, the letter said he had expressed “strong concerns over the possibility of significantly increased liabilities for NEDs” at a July board meeting and would have to step down if proposed changes came in. That meeting was attended by people from the Prudential Regulation Authority and the Financial Conduct Authority, the letter said. Regulators have warned politicians about “strong lobbying” by banks against the new rules. Tyrie said on Monday that bankers should speak up when they think regulators are “getting it wrong”, but needed to do so clearly and accurately.