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Durham joins team to tackle banks

20 July 2012


THE Bishop of Durham, the Rt Revd Justin Welby, has been appointed to sit on the Parliamentary Commission on Banking Standards, which will investigate the Libor scandal.

MPs voted to set up the commission on Tuesday. It will be composed of five MPs and five peers, and will be led by Andrew Tyrie MP, the chairman of the Treasury Select Committee. Bishop Welby will sit on the commission as "a non-politically aligned member of the House of Lords", Durham diocese said.

The terms of reference, set out in a parliamentary motion, ask the commission to consider and report on the "professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the Libor rate-setting process". It is also to look at "lessons to be learned about corporate governance, transparency, and conflicts of interest, and their implications for regulation and for government policy".

The commission will sit through the summer recess, and report before 18 December, in time for its recommendations to be included in the Banking Reform Bill. It will have the power to appoint lawyers to cross-examine witnesses.

Bishop Welby knows something of the territory, having worked for many years in the oil industry, including five years as Group Treasurer of Enterprise Oil, a FTSE 100 company.

He said on Tuesday: "Having started dealing in these markets from the oil-industry side in the late 1970s, and with experience not only of Libor-related instruments but also of a range of derivatives and many other forms of market, as well as being involved in the City of London through work on ethical investing in recent years, this is an area where I hope to be able to make a useful contribution."

The work commitment involved in sitting on the commission would be "intense, but short-lived", he said. Ethical markets, he said, were "essential to a flourishing economy, and thus jobs".

In recent months, Bishop Welby has made a number of interventions in the House of Lords on the topic of finance. Earlier this month, he spoke in favour of an amendment to the Financial Services Bill which would make the Financial Policy Committee responsible for promoting "a stable and sustainable supply of finance of the economy" ( News, 6 July).

Speaking in the Committee stage of the Financial Services Bill in the House of Lords, on Wednesday, Bishop Welby said that "in areas where access to finance is most wanting. . . regulation. . . is what will enable competition to start to break the stranglehold of some of our larger lenders, who neither lend in these areas themselves nor are willing to make space for others to lend in them. That is a fundamental reason why there is still a shortage of finance."

The Committee stage of the Bill continues on 25 July.

Question of the Week:  Do you trust your bank?

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