Bankers association chief says unit will look at whether a board could restore confidence after mis-selling and Libor scandals
A high-level taskforce to examine whether the creation of a banking standards board can restore confidence in bankers after mis-selling scandals and the Libor rigging affair has been set up by the industry.
With its ethics already being investigated by a committee led by MP Andrew Tryie, the major banks want to appear to be on the “front foot” in efforts to repair their battered image.
Anthony Browne, the new chief executive of the British Bankers’ Association (BBA), said a taskforce had been set up to look at the merits of a banking standards board — an idea promoted by Barclays in its submission to Tyrie’s commission.
“There have been a lot of discussions about setting up a banking standards board to uphold ethical standards,” said Browne. “We are now actively taking this forward.”
Browne joined the BBA last month from Morgan Stanley and has also had spells as a journalist (including at the Observer) and as an adviser to the London mayor, Boris Johnson.
“It has got to be credible. There is no point doing this if it seems like a white wash,” he said ahead of the BBA’s annual conference on Wednesday which politicians, regulators and top bankers are all expected to attend.
Some people working in the City need to be authorised by the Financial Services Authority, which can fine and ban individuals. One idea behind setting up a board would be to make it uphold ethical standards and be independent of the BBA.
Confronted by polling data showing that “the overwhelming majority of the population are cynical about banks” being trustworthy, Browne said: “Trust is lost quickly and takes a long time to get back.
“Extraordinary times require extraordinary measures. Everyone realises you can’t carry on like this.”
The discussions about a standards board are still in the “early days” he said, adding: “We’re facilitating the discussion.”
Ahead of appearing before Tyrie’s other committee – the Treasury select committee – on Thursday to discuss tools that can be handed to the Bank of England’s Financial Policy Committee to ensure financial stability, Browne said he wanted to get across that the industry had changed in the four years since the taxpayer bailouts.
Capital levels are higher, banks are holding more liquid instruments and cash bonuses have been replaced by ones paid in shares, he said. “There is a perception nothing has changed. The reality is a lot has changed. People wanted heads to roll … we’ve had a complete change of the boards of directors [banks].”
The payment protection insurance (PPI) mis-selling scandal – where the BBA had previously co-ordinated the industry’s court action against the FSA – was a “disaster”, he said.
Banks were now working towards becoming more focused on their customers, said Brown, who took up his role as the BBA was stripped of any involvement in setting Libor, the latest scandal to grip the industry.
He expects frequent dialogue with Brussels and Sharon Bowles, the influential Liberal Democrat MEP who has applied to be the next governor of the Bank of England and was at the BBA on Friday for discussions.
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