By Daniel Hunter

John Cridland, CBI Director-General, has said the report from the Parliamentary Commission on Banking Standards must put customers first.

The 571 page report laid out severe recommendations surrounding a sector that has been beset with scandals and major problems that have destroyed all trust.

“There’s no way we’ll get the economy firing on all cylinders again without a healthy banking system. The best way to restore public trust in banking is by putting customers first and by boosting competition," Cridland said.

“Putting customers in the driving seat to choose which service works best for them promotes competition. Moves to improve the transparency around the price of products and services are welcome and alongside seven-day switching, will help restore confidence in the competitiveness of banking.

“To make sure that potential barriers to entry to the market for new banks are reduced, a competition objective for the Prudential Regulation Authority makes sense.

“We’re pleased that the Commission has recognised the importance of alternative sources of finance to help growing businesses. The recommendation for the Treasury to look at how the tax system can support alternatives like peer-to-peer lending and crowdfunding will help ensure that they can compete on a level-playing field with traditional providers.

“Any further study of the retail and small and medium-sized business banking markets must avoid the well-trodden ground of many previous reviews.”

On individual responsibility, he said: “Senior personnel in banks have a huge responsibility to set the right tone and culture. It is important to have a vigorous vetting procedure in place and we back a broadened licensing regime with a single set of standards. Employees who have been struck-off should not be able to work in the sector again.”

“There are tough criminal sanctions in the UK for those who engage in fraudulent behaviour. Enforcing these must come before the introduction of new sanctions.”

On remuneration, he said: “The Commission has not followed the ill-advised route of trying to impose artificial pay caps. Ensuring remuneration is firmly linked to long-term performance and behaviour is the right way to promote a better culture.”

On RBS, he said: “RBS is already well down the route of restructuring its business.

“It’s in everyone’s interests, including businesses, for RBS to be returned to private hands as soon as possible, and the best way to do this is to give the bank regulatory certainty and the space to restructure, free from political interference.”

Join us on
Follow @freshbusiness