Bankers will not run new industry standards body
THE NEW body being set up to improve standards in banking and restore faith in the industry will not be run by bankers, Sir Richard Lambert is expected to announce tomorrow.
The former boss of the Confederation of British Industry (CBI) is thought to be keen to avoid claims the group is run by bankers for bankers.
Instead he is expected to say the body will have more gravitas and credibility if it is run by major figures from other industries and other walks of life.
However, it will still contain a minority of bankers to advise the other members on the technicalities of banks’ operations and the nature of the industry.
Sir Richard was appointed by a group of banks including HSBC and Barclays to find a way to make the industry more professional.
The group hopes the move will begin to restore trust in a sector devastated by the financial crisis and subsequent scandals such as the Libor fixing episode.
The industry has had a wide-ranging debate over the type of action needed to restore faith.
One option is to increase the number of staff with training in banking disciplines, potentially signing up banks who agree only to hire qualified staff for certain jobs.
However, opponents of such a scheme note that banking is not one job, as the sector is huge and spans a wide range of skills and activities. As a result such a proposal may not work well in practice, and it could restrict the pool of workers able to take the senior jobs on offer.
Another idea – set to be rejected by Sir Richard – is to make bankers swear an oath to serve customers, similar to that given by doctors.
It comes after new measures from the Sir John Vickers Commission and the Parliamentary Commission on Banking Standards, which want to ring-fence retail banks away from investment banks, in the questionable belief that investment arms are somehow riskier than retail units.