British bankers face annual competency checks under proposed law

PUBLISHED : Wednesday, 27 November, 2013, 11:32am
UPDATED : Wednesday, 27 November, 2013, 11:32am

Britain’s senior bankers will face an annual competency check under new laws being drawn up in Parliament to reform the British banking sector and protect it against future crises.

A proposal for a new licensing regime, put forward by the opposition Labour Party, unexpectedly won the support of lawmakers in the House of Lords, the upper house of Parliament, by a narrow margin of five votes on Tuesday. The government voted against the proposal.

As a result, laws to toughen up professional standards in banking could now include an annual assessment of an individual against “minimum thresholds of competence” and a recognised code of conduct.

The government said the change would not noticeably improve standards and would add to banks’ regulatory burden. Finance minister George Osborne could yet try to overturn the proposal before it becomes law.

The defeat for the government comes after it conceded ground on another contentious part of the new banking laws earlier in the day by asking the Bank of England to decide whether it needs more powers to control risk taking by banks.