Regulatory body should be headed up by non-bankers

A new regulatory body designed to help the banking sector needs to be headed up by people outside of the industry, claims its creator.

Richard Lambert, ex-director general of the Confederation of British Industry (CBI), believes the planned organisation should appoint non-bankers to help instil confidence amongst the public and ensure it is totally impartial.

Plans for the new body were given the go ahead after a number of scandals have hit the UK banking sector in recent months. Participating banks will publish an annual report on whether they are meeting the new standards adequately.

So far, HSBC, Barclays, Lloyds, RBS, Santander and Nationwide have all agreed to abide by the regulatory body.

Mr Lambert, speaking to Reuters, stressed it is an ideal move to help improve the perception of the industry.

“It will take years to change the culture of the banking industry and so to demonstrate beyond doubt the impact of the new organisation. The objective is a measurable and continuous improvement in the conduct and culture of banks and building societies doing business in the UK,” said Mr Lambert.

He added he would be happy to take up the role of chairman but stressed this decision must not be made by the banks themselves. Instead, he suggested members of the body should be representatives from consumer and employee groups, investors and small business owners.

Last month, a poll by an accounting and services company showed optimism returning to the UK’s banking and financial industries.

The EY European Banking Barometer discovered around three-quarters of those polled believe macroeconomic conditions are set to improve – something that would help boost business confidence.

It would also appear that UK bankers are more optimistic than their European colleagues, according to the survey, with British workers showing stronger support for an increase in lending.

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