BANK of England governor Mark Carney has backed a plan by Britain's biggest banks to set up a new body to improve standards in the industry.
The Banking Standards Review Council (BSRC), funded by but independent from the banks, is to be launched later this year after the industry accepted recommendations from former CBI director general Richard Lambert.
Banks are trying to repair their image tarnished by the 2008 financial crisis and scandals including the rigging of benchmark interest rates, allegations of foreign exchange market rigging and the mis-selling of loan insurance.
Mr Lambert said: "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."
Mr Carney urged all banks which operate in Britain, domestic and foreign, to support the initiative and said: "We need a financial system that is safe, fair and acts with integrity. The Bank of England is doing its part to ensure safety and soundness. Integrity, however, cannot be regulated, it must come from within."
The BSRC will champion good practice, requiring banks to commit to improving their culture and to report back on performance to the public each year.
It will also produce an annual report highlighting progress made the industry and by individual banks, and what more needs to be done.
Mr Carney will help to choose the chairman and chief executive of the BSRC.