New UK banking standards body to be launched later this year

A new voluntary standards body for British banks and building societies will be launched later this year to 'raise standards and competence' within the sector.

 

Funded by the banks themselves at a cost of between £7m and £10m a year and relying on voluntary support rather than statutory powers, the new body will be set up as a 'champion for better banking standards'. It will be underpinned by a 'voluntary and aspirational' goal based on the credo that the banking industry must raise its own game in order to win back public trust.

 

Richard Lambert, former director general of the Confederation of British Industry and author of today's 'Banking Standards Review' report, is under no illusions about the difficulty (and potential controversy) that the new standards body will face in influencing the ethical standards of the same institutions that are providing its finance. According to the report, the new body will have to establish its credibility and independence from the start and 'will have to show that it is willing to set demanding standards, and to speak out when appropriate'.

 

Britain's biggest banks and building societies, namely Barclays, HSBC, Santander, RBS, Lloyds, Nationwide and Standard Chartered, pledged to set up the body in light of recommendations made by the Parliamentary Commission on Banking Standards last year amid a series of scandals involving benchmark interest rates, breaches of anti-money laundering rules and the misselling of complex financial products and loan insurance.

 

The new standards body will require participating institutions to commit to improving their culture and practices and publically report on their finances each year. Standards of good practice will be set, which may include whistleblowing procedures, staff values and behaviours and managing high-frequency trading.

 

At the end of his report, Lambert charts the future face of a banking utopia in 10 years' time and hopes that by then, 'balance sheets of banks doing business in the UK have been restored to health', more bankers have qualifications of one kind or another and 'politicians will have found other footballs to kick'.

 

Recognising the feat of the challenges ahead, Lambert does however concede that 'Realising this vision will require an enormous amount of heavy lifting by the banks and building societies in the years ahead, and by everyone who works in them. It will also require a different approach to their customers, and a much broader view of their role in society. But this is what the public has the right to expect. And it is what the country needs'.

 

Keen to build on and accelerate 'present momentum' on the issue, Lambert says that work to set up the new body should start immediately, with the next step being establishing an independent panel to appoint the new body's Chairman and approve the Chief Executive.  

Housing crisis threatens London's future business prospects

According to a report published today by the London Chamber of Commerce and Industry (LCCI), London’s housing crisis could seriously undermine the city’s economic competiveness and lead to problems for both employers and employees. The LCCI’s report argues that businesses relying on easy access to a skilled workforce could face staff retention and productivity problems if employees continue to be priced out of the London housing market and are forced to take longer commutes into work.

To overcome the capital’s chronic housing shortage, the LCCI suggests that more land should be secured for development and more builders with the capacity to deliver these homes should be available. Specifically, the LCCI recommends that all brownfield sites in London should be registered by the Mayor of London and private land owners would then be given four years to start building on such sites before a compulsory purchase would be enacted. Public sector landowners would have to start building within two years of being registered.

Public sector organisations are estimated to own as much as 40% of all brownfield land in London. Over 653 hectares are owned by the Greater London Authority, while a further 29.4 hectares are owned by the London Fire Brigade, 45.9 hectares by the London Legacy Development Corporation and 103.3 hectares by the Metropolitan Police Service. Other bodies like the NHS, local authorities and government departments also hold brownfield land in London, but do not publish this data. The LCCI suggests that ‘excess public sector land’ should be sold for development.

One controversial proposal in the LCCI’s report recommends that local authorities work with the Mayor of London to evaluate the potential to reclassify ‘a proportion of poor quality greenbelt land’ within the Greater London area for housing. The LCCI states that although any proposals to build on greenbelt land will ‘stir strong emotions amongst residents local to affected sites, the creation of truly “garden” suburbs in a handful of formerly private greenbelt areas could secure the delivery of the homes that London needs for generations to come’.

Over the last decade, London’s population has grown by around a million, faster than at any other time previously, to 8.4 million in 2013.  However, not enough new homes have been built to cope with this increase, with around 20,000 new homes a year being built in London over the last 10 years. To ensure that developers are producing the homes that the majority of Londoners need (those earning less than £50,000 and in the low to mid-housing price range), the LCCI suggests that the Mayor of London should set a new annual target for the creation of homes affordable to those earning up to £50,000.

LCCI’s survey of London businesses also found that 59% of employer respondents believed that increased housing costs have led to a greater pressure to increase wages for three in five employees. Rising housing costs have, according to the LCCI’s survey, also diminished businesses’ ability to recruit and retain skilled workers, with 42% of businesses stating that increased housing costs have had a negative impact on recruitment. One third (33%) of London firms surveyed believed that the lack of affordable housing in London affected punctuality and productivity. LCCI says that ‘employees that regularly endure travel fatigue are unlikely to be as productive and motivated as they could be, as long commutes have been found to make workers less happy and more anxious’.

Speaking about the LCCI’s proposals, LCCI’s Chief Executive, Colin Stanbridge, says, ‘There is no magic wand that can change this situation overnight but we urgently need to start building many more homes that ordinary Londoners can afford to buy or rent, otherwise we could find the workforce that is the capital’s greatest asset under threat’.