UK banking standards to be overseen by new body

11th February 2014

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In a bid to re-build public trust after a plethora of scandals and shocks, UK banking standards are set to be put under another microscope by a new professional organisation following a review by former CBI director Sir Richard Lambert writes Philip Scott.

The aim of the yet unnamed body will be to boost the sector’s performance and reputation and to act as an independent arbitrator for better banking standards. The organisation would be funded by the British banking industry.

The hope is that this new body will help banks to rebuild public trust and to play their proper part at the heart of a healthy economy according to Sir Richard.

He said: “The objective is a measurable and continuous improvement in the conduct and culture of banks and building societies doing business in the UK.”

The proposals set out in Sir Richard’s Banking Standards Review would see banks having to report annually on their behavior and competence. He was asked to set-up the body by Barclays, Lloyds, HSBC, Royal Bank of Scotland, Santander, Standard Chartered and building society Nationwide.

Sir Richard asserted: “It takes years to change the culture and practices of an industry: banking will be no exception. However, there is today both the need and the opportunity to get the process under way.

“After the excesses and shocks of recent years, we are moving into a new world for banking, where the only alternative to ever more burdensome regulation is improved standards of competence and behaviour.”

However Andrew Tyrie MP, warned that any body could not be a “substitute” for proper regulation by the authorities according to The Telegraph.

Matthew Fell, CBI director for competitive markets, adds: “Restoring trust in our banking system is fundamental to the future of the UK economy. With its emphasis on standards and ethics, Sir Richard’s review is an important piece of the jigsaw to help reinforce a culture change that puts the customer at the heart of everything banks do.

“Transparent reporting of performance is important so that banks don’t just sign up to these new standards, but live and breathe them. Good conduct and ethical behaviour should be important to future career mobility, so the transition to a professional body with individual membership is appealing.”

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