Bank Chiefs Split Over New Standards Body
A split has emerged among Britain's major banks about the development of a new standards body that would trumpet the power to strike off rogue bankers as part of a campaign to repair the industry's battered reputation.
I have learned the chairmen of the six biggest UK-based lenders held talks on Tuesday aimed at thrashing out plans for a new Banking Standards Board, which would be administered independently of the industry.
People familiar with the discussion said the bank chairmen had divided into two camps over the proposals for the standards body, which have been publicly endorsed by the industry lobbying group, the British Bankers' Association (BBA).
Some of the chairmen, said to include Sir Philip Hampton, chairman of the state-backed Royal Bank of Scotland (RBS), are understood to favour the immediate creation of the new organisation, which would have powers similar to those held by the General Medical Council and other professional standards bodies.
Sir David Walker, the new chairman of Barclays, has also publicly expressed strong support for an independent organisation which all professional bankers would be obliged to join.
A number of the bank chairmen, however, are understood to oppose acting in the next few months.
Said to include Lord Burns, the chairman of Santander UK, this faction argued during Tuesday's talks that looming changes to the way Britain's banking industry is regulated necessitated a delay to the formation of the new standards board.
"The argument was that we should wait until we see how the new Financial Conduct Authority approaches these issues before acting," a senior bank executive told Sky News.
Anthony Browne, the BBA chief executive, is also understood to have participated in Tuesday's conference call. People close to the talks insisted the new standards body had the unanimous banking of Britain's major lenders.
One insider said the "muddy compromise" that had been reached during Tuesday's talks would be contained in a new submission by the BBA to the Parliamentary Commission on Banking Standards, which is examining bankers' conduct in the light of a series of scandals.
The idea for a new standards body was contained in a submission by Barclays to the Parliamentary Commission last September. The panel was set up by ministers in the wake of Barclays' £290m fine for manipulating the interbank borrowing rate Libor.
"(The) Chartered Institute for Bankers would offer "certainty and confidence to customers that they are being served by qualified and trustworthy professionals who are bound by a code of conduct and are individually 'licensed'," the Barclays submission said.
None of the bank chairmen could be reached for comment on Wednesday. The BBA declined to comment.