By William James
LONDON, April 22 (Reuters) - At least one of Britain's majorbanks should be broken up into smaller regional lenders, theArchbishop of Canterbury, who sits on an influential bankingreform committee, said on Monday.
Justin Welby, spiritual head of the Anglican Church, spokein a personal capacity, but his comments offer insight into thethinking of the Parliamentary Commission on Banking Standardswhich has the role of cleaning up Britain's banking culture.
"In simple terms, we need to recreate the local, and theeasiest way to do that, as well as bringing new entrants in, isto kill two birds with one stone by recapitalising at least oneof our major banks and breaking it up into regional banks,"Welby told an audience in London that included business leadersand politicians.
The commission is due to publish a report in May on how toaddress the ethical problems in the City of London exposed by aseries of scandals. The report should also look at the impact oncompetition.
Finance Minister George Osborne set up the commission lastyear after Barclays, one of the oldest names in Britishbanking, was fined $450 million over the manipulation of globalinterest rate benchmarks.
Welby, a former oil executive at France's Elf andLondon-based exploration company Enterprise Oil, was named headof the Church in November and sits in the upper house ofparliament. Prime Minister David Cameron has spoken of the valueof his corporate experience.
He said one step to address the problems highlighted by thenear collapse in 2007 of mortgage lender Northern Rock, was totake lending decisions out of the global financial hub of Londonand into the communities directly affected by them.
Welby also backed greater transparency through the creationof a 'good bank, bad bank' system - echoing the thoughts ofother lawmakers on the committee.
Only recommendations that are supported by every member ofthe commission, made up of nine men, including a formerinvestment banker, and one woman, a former executive withCitigroup, will be put forward, its members told Reuters.
Osborne does not have to implement their proposals but giventhat he created the commission, it is believed likely that atleast some of the recommendations will be taken up.
Barclays (BARC)