The outgoing chairman of Barclays said on Monday that big fines on banks were making it harder for the industry to win back public trust.
Sir David Walker, appointed chairman of Barclays in the wake of the Libor-rigging scandal in 2012, also suggested fines were being levied for activities that in the past might have been regarded as acceptable, though he acknowledged past conduct issues needed to be dealt with.
Telling the industry there was an “urgent need for a proactive initiative … to turn the tide” and restore public confidence, Walker said: “Some penalties may be regarded as disproportionately big, and mistrust in some degree has been fed by application of modern regulatory standards to market practices that were long regarded as acceptable to the extent they were under any earlier form of regulatory oversight.”
He added: “Nonetheless, the cumulative overall scale of enforcement initiative can only be regarded as indicative of grave failures of banks. What confidence can we have that, while much of this action relates to regulatory issues, there are not underlying problems that persist?”
Walker, who is stepping down as chairman next year, said regulators “cannot and should not try to regulate culture” as he questioned the size of fines being handed out in helping restore trust in the banking industry.
“While full and timely remediation of established client loss should always be a high priority for the regulator, it seems clear that the comparative detachment of many enforcement agencies from the supervisory and regulatory process and the high political and media profile of enforcement actions is not itself conducive to the re-establishment of trust in bankers and banking,” he added.
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