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There has been a raft of new regulation seeking to prevent this from happening again. But that alone is not enough, as the UK Parliamentary Commission on Banking Standards made clear in its 2013 report that followed the Libor rate-rigging scandal. The commission identified a lack of basic standards of professionalism as another large part of the problem The report challenged policymakers and regulators — but principally the banking sector itself — to take responsibility for raising the bar.
The Banking Standards Board (BSB), a private-sector body founded in the wake of that report, calls on the industry to take the next step. BSB is publishing a statement of principles that challenges firms to make a strategic commitment to strengthening professionalism across their organisations and provides a practical blueprint for doing so.
UK regulators have already taken an important step by establishing a senior managers and certification regime. It requires practitioners to act honestly, competently and with integrity. If they do not they may lose their certificate, equivalent to a doctor’s licence to practise. A new consultation has just been announced on a public industry register, another feature of many professions. But unlike the professions of medicine, accountancy or the law, there is no general requirement or expectation for those covered by the senior managers regime to hold a specific qualification. That is largely because banking brings together different skill sets, disciplines and knowledge, with a range of qualifications and professional bodies. Rather than seeing banking as a single profession, there is need to think more broadly.
Compliance with the letter of the senior managers regime is not enough. A BSB project drawing together firms, professional bodies, regulators, trade unions and other subject matter experts has challenged the sector to be more ambitious. To strengthen professionalism there is need to look at the attitudes, judgment and standards of behaviour, knowledge and skills of everyone who works in banking in whatever role.
Individuals have responsibility for their own development. But driving higher standards is also about companies creating cultures which recognise their obligations to customers and the community, in which diversity of thought is valued, and challenge is welcomed.
Full article on Financial Times (subscription required)