UK Banks to start the longest journey?
A new standards body for the UK banking industry is set to be established later in 2014 with Bank of England Chair Mark Carney nominated to lead an independent panel tasked with selecting the foundation Chair and CEO of the new watchdog.
The formation of the Banking Standards Review Council follows the February 2014 consultation paper released by Sir Richard Lambert’s Banking Standards Review which was tasked with examining how to ‘promote high standards of behaviour and competence across the UK banking industry.’
Carney has recently been critical of UK banks and the financial system in general, calling for improved ethics, a restoration of community trust and pointing to the need for further reform of global financial practices.
The Bank of England has helpfully posted a video of his latest address to help spread the message.
Other key figures have also recently called for change within the finance sector with Carney’s BoE predecessor, Mervyn King, recently cautioning that the banking system in the UK needs to be overhauled if it is to avoid future systemic risks and rebuild public confidence.
IMF chief, Christine Lagarde speaking at the Conference on Inclusive Capitalism also weighed to the debate delivering a withering assessment to the on the need for a fundamental shift in values that left no room for misinterpretation:
‘Aristotle teaches us that virtue is molded from habit, from developing and nurturing good behaviour over time. As with anything worth doing, practice makes perfect. Getting back on the right path requires education and leadership that is sustained over many years.
‘It requires alert watchdogs, including from civil society.’
‘ Most importantly of all, it requires investors and financial leaders taking values as seriously as valuation, culture as seriously as capital.’
Meantime the rolling announcements of bank misdemeanours continue with Barclays’ £26m fine in regard to allegedly rigging gold markets and a record $2.6b (£1.5b) fine levied on Credit Suisse for aiding US tax evaders are recent examples of a culture gone awry.
Deutsche Bank is making provisions for fines to arising from forex dealings and the full extent of international investigations into Libor rate rigging is yet to emerge.
The Telegraph Top 10 Bank Fines list will no doubt need further revisions.
The Banking Standards Review Council has a bumpy road ahead to meet its objectives as outlined in Lambert’s May Report. However, as Chinese philosopher, Lao-Tzu noted in around 500BC ‘the longest journey starts with a single step.’