The Parliamentary Commission on Banking Standards (CBS) set up in mid-July has called for evidence to help it produce the report it needs to finalise by 18 December. The report is to consider what legislative or other action might be needed to address:
- professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the LIBOR rate-setting process; and
- lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for government policy.
The Commission asks for views on several issues, including:
- whether professional standards in UK banking are absent or defective and what have been the consequences of any defects;
what caused any problems in banking standards, and specifically the impact of matters such as:
- banking culture, including incentivisation of risk-taking;
- the impact of globalisation, financial innovation and technological developments on standards and culture;
- global regulatory arbitrage;
- corporate structure, including the relationship between retail and investment banking;
- the level and effectiveness of competition in both retail and wholesale markets, domestically and internationally, and its effects;
- taxation, including the differences in treatment of debt and equity; and
- weaknesses in areas such as the role of shareholders, corporate governance, external audit, the regulatory structure and criminal sanctions;
- how these issues can and should be addressed, domestically and internationally, and the extent to which the current reform proposals do so.
The Commission requests responses to this initial call for evidence as soon as possible, preferably by 24 August. (Source: Commission on Banking Standards calls for Evidence)