CII ready to help banks raise standards, chief says

The Chartered Insurance Institute (CII) has said it is well placed to help deliver the sort of higher banking standards demanded in the report of the Parliamentary Commission on Banking Standards released today.

The long-awaited report on banking, which was commissioned by the government, proposes a package of measures aimed at making bankers more accountable, including jail sentences for senior bankers found guilty of reckless misconduct.

CII chief executive officer Dr Sandy Scott said: “It is clear from the commission evidence and recommendations that the level of ethical and professional conduct in investment banking has been deficient.  

“The CII believes, like the commission, that this requires the championing of robust professional standards – which go beyond qualifications – by properly resourced and committed professional bodies.

 “Since 2008, the CII has led the way in developing professional standards for investment advisers in all four high street banks. This includes mandatory qualifications, continuous professional development and a commitment to a code of ethics and consequent disciplinary sanctions. 

“With more than 112,000 members, the CII is the largest professional body in the financial services sector and is well placed to meet the public interest demands that the commission has identified for improved standards in banking.

“We will actively look to engage using our scale, history and expertise to help develop professional standards in the future.”

 The cross-party commission was set up bycChancellor George Osborne last year after a number of scandals involving the industry. Its key recommendations include:

• senior bankers should be assigned clear personal responsibilities;
• reckless disregard of assigned responsibilities should be made a criminal offense – with penalties including the possibility of a prison sentence;
• bonuses for bankers should be deferred for up to 10 years, with the ultimate payout linked to the long-term performance of the bank and the employee’s business area;
• it should be possible to cancel deferred pay and pension rights if a banker misbehaves or – for senior bankers – the bank has to be bailed out; and
• banks should be legally required to put financial safety ahead of shareholder interests.