A brand new watchdog is to be launched later this year, designed to maintain standards in banking for individuals and businesses alike.
The Banking Standards Review Council (BSRC) was recommended by Sir Richard Lambert, the former director general of the Confederation of British Industry (CBI).
The BSRC is to be funded by the banking industry but is set to remain entirely independent of the banks in an effort to rebuild confidence in the system.
“Rebuilding confidence and trust in the banks is especially vital in the UK, because of the size of the banking system and the importance to the economy of London’s role as an international capital market,” said Lambert.
The role of the BSRC will be to monitor banking culture, including how well employees understand codes of conduct, whilst scrutinising the overall competence of bank employees and their professional qualifications.
Sir Richard Lambert’s reasoning behind his recommendations for the BSRC follow an eight-month long project in the wake of a host of mis-selling and market-rigging scandals, which have tarnished the reputation of the UK banking industry.
Katja Hall, deputy director general of the CBI, believes that the watchdog makes sense to provide new regulatory focus with the UK’s economic recovery gathering speed, focusing on how banks can best serve their customers – especially expanding start-ups and SMEs.
“Sir Richard’s recommendations for banks to commit to driving continuous improvement, with transparent public reporting, alongside new good practice standards, are a sensible way forward,” said Hall.
“With the political and regulatory spotlight now firmly on conduct, a swift and positive response from the banks to these proposals, combined with changes already underway, should help to rebuild trust in this important sector over time.
“In addition, with more new players entering the banking sector, and competition hotting up, good customer relationships are a real competitive advantage for banks.”
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