The long-awaited parliamentary report on UK banks is underwhelming. In part, that's a reflection of the Parliamentary Commission on Banking Standards' fuzzy remit and limited powers. Set up last July in the wake of Barclays' Libor shame by Chancellor George Osborne to address perceived ethical failings in the industry, the commission's biggest hits come when it addresses that original purpose.
The diagnosis of pre-crisis banker conduct is spot on. The commission pithily characterises managers as adopting a "Murder on the Orient Express" defence - insinuating that no one could be held guilty because all were party to the crime. The commission's recommendation is for managers who willfully endanger their institutions to receive criminal sanctions, including jail. That is welcome: justice by jury is preferable to the trial-by-tabloid meted out to former Royal Bank of Scotland Chief Executive Fred Goodwin.
Proposals to reform pay seem sound, too, such as a recommendation that regulators be able to claw back HBOS-style mega-pension pots as well as deferred pay if a bank founders. The commission also argues that bonuses should be deferred by up to 10 years. HSBC is currently the only big bank operating in the UK that encourages such a long-term view.
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It's when the commission strays from its initial mandate that its conclusions are less convincing. The report urges the abolition of UKFI, set up to manage the government's holdings in RBS and Lloyds. Instead, it argues, the government should review RBS's strategy by September so the bank's management can be freed from interference. Tellingly, the commission ducks any firm proposals itself on RBS's future.
Other ideas pushed by the commission look likely to add costs and red tape for no obvious reward, like its push for a register for approved persons and a shiny set of ethical rules. Its members argue regulators would be unable to hold bankers to account without them. But it's hard to see why. Likewise, it's not clear what will be gained from yet another inquiry into banking competition. Previous tours d'horizon fell on deaf ears, like the Cruickshank review in 2000.
The banking standards commission has avoided that fate, not least because of its excoriating earlier missive on the collapse of HBOS. But its final report - despite being 576 pages - pulls more punches than it lands.