A sea change in regulatory investigations and enforcement − speech by David Chaplin

The Bank of England's head of enforcement has signalled a significant shift in the regulator's approach to investigations, promising faster resolutions, greater transparency and a willingness to pursue individuals as well as firms in cases of serious misconduct.

In a speech delivered at a legal conference in London, David Chaplin said the existing enforcement framework was too slow, too opaque and too focused on corporate penalties rather than individual accountability. He announced a series of reforms designed to address each of these criticisms.

The most significant change is a commitment to complete the average investigation in 18 months, down from the current average of approximately three years. Chaplin acknowledged that this was an ambitious target but said the current pace of enforcement was failing to provide the deterrence that was its primary purpose. "A penalty imposed five years after the misconduct is a historical footnote, not a deterrent," he said.

Chaplin also signalled that the Bank would make greater use of its powers to pursue individuals, including the Senior Managers Regime, which allows the regulator to take action against senior executives who fail to take reasonable steps to prevent misconduct. He noted that the number of individual enforcement actions had fallen in recent years and said that trend needed to be reversed.

The speech was welcomed by consumer groups and criticised by some in the financial services industry, who argued that faster investigations could compromise fairness. Chaplin addressed that concern directly, saying that fairness and speed were not in opposition. "Justice delayed is justice denied," he said. "That principle applies to regulatory enforcement as much as it does to the criminal law."