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Plans for banking standards body unveiled

Former head of the Conferation of British Industry Sir Richard Lambert has set out his final recommendations to set up a professional body tasked with improving the repuation of the UK’s banking industry.

The Parliamentary Commission on Banking Standards recommended last June that an organisation should be set up, independent of the banking industry, to boost standards in the sector. Lambert, also a former member of the monetary policy committee and a former editor of the Financial Times, was appointed to head up the body last June.

Lambert has today set out a “deliberately aspirational” plan to improve “the behaviour and competence” of banks and building societies.

Under the plans, the Banking Standards Review Council banks will have to publicly report on banks’ performance in a “programme of continuous improvement” in areas of culture, competence and customer outcomes.

It will meet once a year with senior representatives from larger banks and building societies to discuss whether they are improving over time and in relation to other firms. The body will have to make clear where particular sectors or institutions need to do more.

The report says: “This document is deliberately aspirational in nature. It is informed by the belief that the banking sector must voluntarily raise its game if it is to win back trust, and that there is a vital public interest in it doing so.”

Treasury select committee chair and former chair of the Parliamentary Commission on Banking Standards Andrew Tyrie says: “The Banking Commission concluded the creation of an effective professional body for banking was a long way off and may take at least a generation. The initial recommendations published by Sir Richard today represent a welcome first step towards that long-term goal.

“While this ambitious long-term project gets under way, wide-ranging reform is needed now on a number of fronts to secure improvements to standards. High on the list are reforms to banking remuneration—incentivising good behaviour, not bad—to corporate governance, and to regulatory supervision and enforcement. These reforms must be implemented as a package if trust in banking is to be restored.”

The report welcomed news from the FCA in March that all major retail banks had either replaced or made substantial changes to their sales incentives schemes that helped contribute to misselling scandals. However, it added: “There is still much more to be done in this area, and in others.”

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  1. In 1984 I joined the then Institute of Bankers which shortly after became the “Chartered Institute of Bankers”. I sat some of my banking exams with the CIOB and whilst it was initially encouraged for all who wanted to go in to management, as the sales drives of the banks increased, focus on the exams died off in favour of just being good at sales and having banking qualifications started to be a liability rather than an advantage. Since then the CIOB has changed to using a trading name “The Institute of Financial Services”. Rather than reinvent the wheel, might not have been better to change the aims and structure instead of the existing charter holding professional body?
    When I changed to Insurance and Investment related work, I became a member of the LIA and SOFA (later to become the PFS) and lapsed my membership of the CIOB. I undertook most of my exams from then onwards with the CII.
    Ironically the CII has just started to offer it’s first banking exam RB1 and as they will not recognise or give credit for my banking exams as they are over 10 years old, to prove I still know enough without studying I did their mock test and passed with over 80%. They will not allow me to sit the exam without paying for a study manual though!, So I am going to sit it anyway to prove a point. i.e. that if I can still do it without study, there is NO excuse for current bank and Regulatory staff NOT doing an equivalent exam.

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