New body ‘must not be a poodle to the banking industry’

Sir Richard Lambert, the former director general of the Confederation of British Industry, said the role of the banking standards body will not be to punish wrongdoing, but aim to provide “a canopy” under which standards should rise.

“It’s not going to say to the bad guys you’re never going to eat lunch in this town again. That’s the job of the regulator,” Sir Richard said at the British Bankers’ Association annual conference.

He was appointed in September by Britain’s biggest banks to design and chair a body to monitor standards, after a series of scandals rocked confidence in the industry.

A panel of MPs recommended the panel be set up to help reform the industry.

Sir Richard said a key measure of the body’s success will be whether it can still make a difference to the industry when the furore over recent banking scandals dies down.

“The task will get harder in five or 10 years’ time when the terrible events of the last few years have been forgotten and bank leaders no longer feel quite as committed to this sort of idea. When things are easy and the world is back to normal that will be the test for this outfit,” he said.

Sir Richard said he was still working on how the body will work, but he wanted it to have an assessment panel where individual banks would be benchmarked on issues such as training, how familiar staff were with values, feedback from customers, or how it dealt with whistleblowers.

The body will be funded by banks, but Sir Richard said it was essential it was independent of them and “must not be seen as a poodle”.