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Banks outline sector reform plans
Barclays has called for a chartered institute of bankers to oversee a professional code of conduct
Britain's high street banks have outlined plans to clean up the sector's act following a summer of scandal for the industry.
The major players - together with regulators and a raft of City institutions - have suggested wide-ranging reforms as part of a Government review of the culture and practices in the banking sector launched in the wake of the Libor rate-rigging furore.
In its submission to the Parliamentary Commission on Banking Standards, Barclays called for the launch of a chartered institute of bankers to oversee a professional code of conduct and register of banking professionals. Those guilty of malpractice could be struck off the register, said Barclays.
It said: "A newly established and independent professional body, with an enhanced foundation of training and accreditation, plus a robust system for detection and correction of misdemeanours, would ensure that a high level of professional standards would be required right across the industry. Customers would be able to confirm that a person was a member of the register, as with other professions, and would have recourse to make a complaint to the governing body in the event that they are concerned with the conduct of that person."
Barclays also confirmed it was considering launching an externally run hotline for whistleblowers as part of an overhaul following the bank's rate-rigging scandal. The embattled banking giant - which was fined £290 million by UK and US regulators for attempting to manipulate the interbank lending rate - is reviewing its whistleblower procedures and looking at plans to outsource its hotline to encourage employees to raise concerns.
In another blow to the future of free banking, Barclays said in its submission there needed to be further debate on the current account structure in the UK. It said: "Free-if-in-credit banking is popular with customers, but banking is not free and banks must make a return for shareholders. The current model may not offer the best way to reconcile those differences."
The Financial Services Authority (FSA) backed the idea of a code of conduct for the banking sector, which it said could build on its regulatory requirements. In written evidence to the commission, the FSA added there could still be "stronger rules" on pay and bonuses within banks, in particular for senior bosses and possibly for non-executive directors. The FSA also wants to beef up its powers to be able to ban an individual on an interim basis while actions against them are ongoing.
The commission published nearly 500 pages of written evidence as part of its review and is due to make its own recommendations for reform by the end of the year.
Consumer group Which? said it wants "big change" within banks to ensure customers come first, and is hosting a consumer event for the commission on Monday to garner views. Which? executive director Richard Lloyd said: "Now is the time for big change in banking, to put customers first, not bankers. The commission, the banks, the regulators and the Government must listen to the public and make sure consumers' best interests are at the heart of the reforms that so desperately need to be made."
Virgin Money, meanwhile, said in its evidence that it believes there should be a full split of retail and investment banks rather than the "ring-fencing" option being adopted by the Government following the report by the Independent Commission on Banking.
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