Standard Chartered chairman Sir John Peace says the current proposals for banking and regulatory reform are backward looking and should instead try to anticipate what might happen in the future.
Earlier this month, the Government published the draft financial service bill on banking reform to implement the recommendations of the Independent Commission on Banking, which proposed to ring-fence banks’ retail and investment operations.
Meanwhile, the financial services industry is in the process of switching to a “twin peaks” system of regulation, with the FSA being replaced with the Prudential Regulation Authority and the Financial Conduct Authority.
Speaking at a panel debate at the British Bankers’ Association’s annual conference in London last week, Peace said: “If we do have a crisis again it won’t be like the last crisis. So it is very important that all of the plans we put in place do not just deal with what happened in 2007-2008.
“I certainly think much of what has happened is looking backwards and not forwards.”
The panel, which included Royal Bank of Scotland chairman Sir Philip Hampton, Lloyds Banking Group chairman Sir Win Bischoff, HSBC group chairman Douglas Flint and Barclays chairman designate Sir David Walker also discussed the idea of setting up a banking standards board to uphold standards and with the power to strike off bankers.
Peace said: “I think the idea of adding a body like this is one that is worth exploring but the devil is in the detail. It is pointless creating a huge bureaucracy that has got no teeth and no purpose.”
Bischoff said the creation of a standards board would only gain public support if it were to strike off any banker which had acted inappropriately.
He said: “I think a standards board is something which many would be behind but I think the public will only think it works when there’s a tangible example of either someone being denied work or being sanctioned.”