The U.K. panel investigating the behavior and practices of banks may call for mandatory ethics exams for workers in the industry, one of its members said.
Conservative lawmaker Mark Garnier said the cross-party Parliamentary Commission on Banking Standards will provide a “direction of travel” when it publishes its recommendations by the summer.
“In the same way that doctors or lawyers or accountants have a code of conduct that reflects the knowledge gap between consumers and practitioners, it is important that bankers work towards a similar code of conduct with a basic ethics training and qualification,” Garnier said in an interview in Parliament in London today.
Chancellor of the Exchequer George Osborne set up the 10-person panel in response to the scandal over the rigging of the London interbank offered rate. A probe by U.S. and U.K. regulators uncovered widespread attempts to manipulate Libor, the global benchmark for $300 trillion of securities. Royal Bank of Scotland Group Plc, UBS AG, and Barclays Plc have been fined around $2.5 billion and at least a dozen firms worldwide remain under investigation.
Britain’s banking standards panel is also considering the lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and government policy.
“The banking commission will not come up with a single silver bullet that will change things instantly, but it will come up with a direction of travel that will see a long-term change to an improved culture in banks and finance,” Garnier said. The commission has yet to decide on its final recommendations, he said.
The Chartered Institute for Securities and Investment said this month aspiring brokers and capital-markets traders will have to pass a compulsory ethics test before they are allowed to sit exams for professional qualifications. Previously the 20-pound ($31) test was voluntary.
Garnier said schoolchildren should have greater financial education.
“It is important to remember that an irresponsible loan has an irresponsible borrower,” he said. “It is vital that the British consumer is educated at school to a level of financial literacy that empowers those borrowing decisions.”
Archbishop of Canterbury Justin Welby, another member of the commission, said on April 23 the U.K. should consider recapitalizing and breaking up at least one bank. He called for the introduction of stronger professional standards in the finance industry.
Welby proposed setting up professional bodies for bankers on the model of Britain’s medical colleges, which regulate doctors, saying that “the vast majority of doctors correct each other.”