New UK banking standards chief won't be "a poodle"

LONDON, Oct 17 (Reuters) - A new standards body for Britishbankers must not be "a poodle" for the industry and shouldimprove and monitor culture so banks can benchmark theirperformance, the man tasked with setting it up said on Thursday.

Richard Lambert, the former director general of theConfederation of British Industry, said the role of the bankingstandards body will not be to punish wrongdoing, but aim toprovide "a canopy" under which standards should rise.

"It's not going to say to the bad guys you're never going toeat lunch in this town again. That's the job of the regulator,"Lambert said at the British Bankers' Association annualconference.

Lambert was appointed in September by Britain's biggestbanks to design and chair a body to monitor standards, after aseries of scandals rocked confidence in the industry. A panel oflawmakers recommended the panel be set up to help reform theindustry.

Lambert said a key measure of the body's success will bewhether it can still make a difference to the industry when thefurore over recent banking scandals dies down.

"The task will get harder in 5 or 10 years time when theterrible events of the last few years have been forgotten andbank leaders no longer feel quite as committed to this sort ofidea. When things are easy and the world is back to normal thatwill be the test for this outfit," he said.

Lambert said he was still working on how the body will work,but he wanted it to have an assessment panel where individualbanks would be benchmarked on issues such as training, howfamiliar staff were with values, feedback from customers, or howit dealt with whistleblowers.

The body will be funded by banks, but Lambert said it wasessential it was independent of them.

"Its independence and governance set up is crucial ... itmust not be seen as a poodle. If it's not going to be takenseriously by the banks we might as well pack up and go homenow," he said.

Lambert said he expects to put forward proposals on how theas yet unnamed body should operate by next summer.