By James Saft
(Reuters) – As Supreme Court Justice Potter Stewart once said of pornography, we may not be able to fully define the proposed new British offense of “reckless banking” but I suppose we will know it when we see it.
Or perhaps, as has been the case about obscenity since 1964 when Stewart dissented in an opinion about the prosecution of a French film, we will just become more used to it.
The British Treasury on Monday said it planned to introduce legislation making possible criminal prosecution of senior bankers for reckless misconduct, a step suggested last month by a parliamentary commission on banking standards.
“The government is determined to raise standards across the banking industry to create a stronger and safer banking system,” British Chancellor of the Exchequer George Osborne said in introducing the government’s response. “Cultural reform in the banking sector marks the next step in the government’s plan to move the whole sector from rescue to recovery.”
The Treasury said it would look into framing the law, which might be applied in situations in which senior bankers, a narrowly and well defined class of employee, could be found to have been reckless.