Sir Richard Lambert, former director-general of the Confederation of British Industry (CBI), has been tasked with setting up a new body that will monitor the standards of the UK banking industry.
Lambert, who led the CBI from 2006 to 2011, was announced as the chair of the body in a joint statement by chiefs of the UK’s big five banks – RBS, HSBC, Barclays, Lloyds and Standard Chartered – on Friday.
The formation of the body was recommended by the parliamentary commission on banking standards in a June report, in which a group of ministers looked at the possibilities of a radical shake-up of the banking sector. This was prompted by a widespread public mistrust of financial services after a series of scandals, including excessive bankers’ bonuses, Libor fixing and the mis-selling of payment protection insurance (PPI).
At the time, the chair of the commission Andrew Tyrie MP called for a stop to all unethical practices within the banking sector, saying, “The health and reputation of the banking industry itself is at stake. Many junior staff who may have done nothing wrong have been impugned by the actions of their seniors. This has to end.”
As part of the recommendations, the commission called for the formation of a standards body, along with a new criminal offence for “reckless misconduct” and new regulatory powers to cancel remuneration.
Commenting on Lambert’s appointment, John Cridland, current CBI director-general, said, “Restoring trust in our banking system is absolutely fundamental to the future of the UK economy and I can think of few people better qualified to do this than Richard.”
He added, “His breadth of experience and fearless independence are exactly the attributes needed to address the cultural and professional challenges which parts of the banking sector face.”