Financial News

  • 18 May 2014, 21:13

Carney Agrees To Help To Heal Bankers' Image

The Governor of the Bank of England is to play a leading role in the creation of a new body charged with rehabilitating the battered image of British banking, Sky News has learnt.

Mark Carney has agreed to chair a selection panel that will be responsible for identifying the inaugural chairman of the organisation, which insiders said would be called the Banking Standards Review Council (BSRC).

The Bank Governor will be joined on the panel by two or three other public figures, and they will be asked to identify a suitable chairman who is perceived to be entirely independent of the banking industry.

Mr Carney's involvement will be confirmed on Monday, when Sir Richard Lambert publishes a series of recommendations paving the way for the establishment of the BSRC.

Sir Richard's eight-month project follows a string of mis-selling and market-rigging scandals which have tarnished the reputation of the banking industry.

The near-collapse of the Co-operative Bank and the opening of an industry-wide inquiry into the possible manipulation of foreign exchange markets have accentuated the reputational crisis confronting major lenders.

The news of Mr Carney's involvement with the BSRC emerged on the same day that he told Sky News that he was concerned about "deep problems" in the UK housing market.

Insiders said that Monday's announcement would include this comment made jointly by the chairmen of the seven major high street lenders:

The chairmen of Barclays, HSBC, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Santander and Standard Chartered welcome the publication of Sir Richard's final report.

It confirms that there is a role for a new Banking Standards Review Council in restoring trust amongst customers and clients.

"They accept his recommendations and undertake to implement them expeditiously."

Sir Richard's work has been undertaken at the request of the major banks but his recommendation to establish a body to oversee bankers' behaviour also echoes a call by Andrew Tyrie, chairman of the Parliamentary Commission on Banking Standards.

In a speech last week previewing his final report, Sir Richard highlighted the risk of a "long period of lower returns (to shareholders) from the banking industry, much as happened in the decades after the great crash of 1929".

He said he would recommend that the BSRC encompass all of the major banks, including overseas-based investment banks, adding: "It's hard to see how a banking standards body could hope to achieve public credibility if it decided to exclude large parts of the industry where the worst stuff has happened."

Sir Richard said the BSRC would require "a really credible governing body" and that "participating banks [should] commit to a programme of continuous improvement under the headings of culture, competence and customer outcomes, and to report back on their progress to the public each year".

He also said that banks would pay close attention to how well codes of conduct were understood by employees.

Neither Sir Richard, the Bank of England or the high street banks, who will be asked to foot the multimillion pound cost of the BSRC, would comment on Sunday.

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