Feb. 11--A PROFESSIONAL body to clean up the UK's scandal-hit banks will not be credible or effective for 'at least a generation', MPs have warned.
The assessment came as a detailed blueprint for an 'independent champion for better banking standards' were published yesterday by former CBI chief Sir Richard Lambert.
It said the organisation, despite being funded by the banks, will 'need unquestioned credibility if it is to exert moral influence over the UK banking industry'.
The review added that the Treasury Select Committee of MPs should hold it to account at least once a year, as the Health Select Committee does with the General Medical Council.
But last night Andrew Tyrie, the Conservative MP and chairman of the Treasury Select Committee, rejected the comparison and said the organisation, to be launched within a year, could not be a substitute for regulators.
He said: 'This is a welcome start to a very long-term project. As the Banking Commission concluded, it could take at least a generation to create a credible, effective body.'
He added: 'There is no parallel with the GMC. The Banking Commission specifically rejected statutory powers for a professional banking body.'
The latest drive to clean up banks comes as Barclays will today lay bare the impact of spiralling costs of mis-selling. Yesterday the lender was forced to rush out details of its profits to the stockmarket after a suspected leak. It said profits – including the cost of provisions and other charges – had hit pounds sterling 2.9bn last year, up from pounds sterling 246m in 2012.
The bank last month said its results would be hit by an extra pounds sterling 330m in charges in the final three months of the year as the bills for mis-selling PPI and interest rate swaps to small firms continues to climb. Lambert was asked in September by the chairmen of the UK's biggest banks to come up with proposals for an organisation to raise standards in banking.
The body aims to define standards of competence that are required in specific roles and assess training programmes.
The new body will create a league table of lenders, which will gauge their ethics and competence.
Banks will have to report back annually to the organisation, which will also promote more restraint on pay. It will have no statutory powers and membership will be voluntary. But it is hoped that all banks will sign up, with individual bankers becoming members in the longer term.
Yesterday the CBI's director for competitive markets Matthew Fell described the review as 'an important piece of the jigsaw to help reinforce a culture change that puts the customer at the heart of everything banks do'.
But critics questioned the need for another 'quango' to police the banks. David Buik from Panmure Gordon said: 'This is a complete and utter waste of time. How many more quangos do we need to get people to behave? If all these regulators can't get banks to behave, we might as well all go home.'
Lambert's review lists six existing professional bodies in banking, including the Chartered Banker Institute. A series of probes have been launched into the UK's banks, the most prominent being led by the Parliamentary Commission on Banking Standards.
In April a system of regulation was launched with the supervision of banks split between the Financial Conduct Authority and the Bank of England'sPrudential Regulation Authority.
BritAIN and Holland are suing over the collapse of online Icelandic bank Icesave. Iceland's guarantee scheme TIF confirmed the pounds sterling 5.6bn lawsuit – filed in November – yesterday. More than 300,000 British and Dutch savers with Icesave accounts lost money when parent company Landsbanki collapsed in 2008. The UK's Financial Services Authority had to come to UK savers' rescue.
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