Senior bankers found guilty of "reckless misconduct" could face prison, according to plans backed by the U.K. Chancellor of the Exchequer on Monday.
George Osborne backed sweeping reforms of the U.K.'s financial sector, which were proposed by a cross-party parliamentary banking commission set up last year in the wake of the financial crisis and the Libor-rigging scandal.
(Read More: Recent Libor Settlements Are Just Tip of the Iceberg)
In a speech at Mansion House (the official residence of the Lord Mayor of London), Osborne said the government will introduce criminal sanctions for "reckless misconduct in the management of a bank". In addition, there will be further crackdowns on bankers' bonuses, and a "tough new regime" governing the behavior of senior bank staff.
"Last summer I called for a thorough and intensive investigation into how to improve standards in the banking system and the PCBS [Parliamentary Commission on Banking Standards] has delivered. I am pleased to say that the government will implement its main recommendations. Where legislative changes are required we will amend the Banking Reform Bill, which is currently before Parliament," Osborne said in a statement.