Overseas Banks Sceptical About Standards Body

By Mark Kleinman, City Editor

Some of the biggest foreign banks operating in the UK have signalled that they are unlikely to join a new body being set up to rehabilitate the embattled industry's reputation.

A number of European and Wall Street investment banks have privately expressed scepticism about this week's launch of the Banking Standards Review Council (BSRC).

Several have told Sky News that they are undecided about whether to sign up to the voluntary body, the remit of which will include monitoring the extent of employees' professional qualifications and their understanding of internal codes of conduct.

Sir Richard Lambert, the former CBI boss, has urged the organisation to encompass "the full range of banking activities" if it was to be "both relevant and credible", with the UK's seven biggest high street lenders already on board.

He now wants the likes of Credit Suisse, Goldman Sachs and JP Morgan to become involved.

In his final report, he wrote:

"Some foreign banks suggested that in the mind of the public failings were largely attributable to those banks which had mis-sold retail products: by implication, the new body was not relevant to them."

One of the largest overseas investment banks, which employs thousands of people in Britain, said it would pay attention to whether its rivals signed up.

"We don't want to be the only foreign bank that doesn't sign up, but we are sceptical about the need to be involved," a source at the institution said.

The publication of Sir Richard's report follows a string of mis-selling and market-rigging scandals which have tarnished the reputation of the banking industry.

The near-collapse of the Co-operative Bank and the opening of an industry-wide inquiry into the possible manipulation of foreign exchange markets have accentuated the reputational crisis confronting major lenders.

As Sky News revealed on Sunday, Mark Carney, the Governor of the Bank of England, has agreed to play a leading role in selecting the inaugural chair of the BSRC.

Monday's announcement about the launch included a statement by the seven biggest high street lenders:

"The chairmen of Barclays, HSBC, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Santander and Standard Chartered welcome the publication of Sir Richard's final report.

"It confirms that there is a role for a new Banking Standards Review Council in restoring trust amongst customers and clients.

"They accept his recommendations and undertake to implement them expeditiously."

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