INSTANT VIEW-Reaction to UK bank governance proposals

July 16, 2009

Sir David Walker    LONDON, July 16 (Reuters) – Following is recation to a UK government-sponsored review of the way the UK banking system is run and governed.
   David Walker, a former chairman of Morgan Stanley bank’s international unit, on Thursday published 39 recommendations for changes in the way banks are run, from pay policies to selecting board members, in a bid to apply lessons from the credit crunch.
    
   PRICEWATERHOUSECOOPERS (PWC)
   “Care is needed if the UK is not to be put at a competitive disadvantage as a result of remuneration proposals. 
   “PwC welcomes the recommendations for NEDs (non-executive directors), however, identifying adequate numbers with relevant experience to fulfil roles may present, at least in the short term, a major challenge.
   
   ANGELA KNIGHT, CHIEF EXECUTIVE, BRITISH BANKERS’ ASSOCIATION
   “These proposals added together make very substantial changes to the rules. The next step — and the key step — will be to get similar high standards adopted internationally.”
   
   PETER MONTAGNON, DIRECTOR OF INVESTMENT AFFAIRS, ABI
   “Some areas need further consideration and clarification. In particular, we do not believe that the remit of non-executive directors should be extended into areas that should be performed by management. 
   And care should be taken that in strengthening the chairman’s role and requiring greater day-to-day involvement, it does not become too dominant. Therefore further consideration should be given to the role of the Senior Independent Director.”
   
   JOHN LIVER, REGULATORY AND RISK PARTNER, ERNST & YOUNG
   “Board directors of financial institutions will be facing greater responsibilities to provide transparency and demonstrate that they are effective at managing risks…
   “Many of the new proposals represent an evolution of good practice — but the challenge will be in finding the right individuals to take up and deliver the additional responsibilities for the board under much closer scrutiny from shareholders.”
   
   DAVID BERMAN, FINANCIAL SERVICES REGULATOR PARTNER, MACFARLANES
   “I am not convinced that any of the Walker proposals would individually, or collectively, have prevented the current crisis…There must be a real concern that the heightened expectations of shareholders, for example being more activist, might lead to an actual (or at least perceived) dilution of directors’ responsibilities and duties — surely this is NOT what we need right now!”
   
   RICHARD LAMBERT, DIRECTOR-GENERAL, CBI
   “In particular, we welcome the emphasis on ensuring balanced boards which are also equipped with the right skills, and on ensuring investors are active and engaged in scrutinising business strategy. 
   “We must also put this report in perspective. To help avoid another financial crisis we need changes in the way we regulate systemic risk. Debates about corporate governance should not distract us from the need for effective financial regulation.”
   
   FINANCIAL SERVICES AUTHORITY (FSA) REGULATOR
   “Many of the recommendations complement the work the FSA is currently doing in respect of risk management, remuneration policies and strengthening the approval process for significant influence functions (SIFs). 
   “The FSA will contribute to the consultation process and will issue a paper in the autumn, which will outline the FSA’s proposed response to any final recommendations of the Walker Review that may have implications for FSA procedures or its interaction with the firms it regulates.”
   (Reporting by Kirstin Ridley) ((kirstin.ridley@thomsonreuters.com; +44 207 542 7987; Reuters Messaging: kirstin.ridley.reuters.com@reuters.net))
 Keywords: BRITAIN BANKS/WALKER 
  
For Related News, Double Click on one of these codes:[M] [T] [E] [D] [UKI] [PSC] [EMK] [WEU] [EUROPE] [EU] [FIN] [BNK] [REGS] [GB] [DE] [FR] [DFIN] [INVS] [BANK] [BACT] [CEEU] [FINS] [BSVC] [LEN] [RTRS] [LLOY.L] [BARC.L] [HSBA.L] [RBS.L]
 For Relevant Price Information, Double Click on one of these codes:<LLOY.L> <BARC.L> <HSBA.L> <RBS.L>
 Thursday, 16 July 2009 11:51:57RTRS [nLG43435] {EN}ENDS

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/