UK banks 'could face tougher regulations'

After a stormy few weeks for the banking sector, further tough news has emerged with the suggestion that chancellor George Osborne could be asked to implement reform of the financial services sector through an even more stringent regulatory regime.

With public pressure mounting over the scandals that have hit Royal Bank of Scotland (RBS), the Co-operative Bank and payday lenders in recent months, it looks likely more action could be taken to rein in the industry.

Justin Welby, the Archbishop of Canterbury, joined former Tory chancellor Lord Lawson and a number of other senior peers to tell the Financial Times robust action needs to be taken on financial services firms that step out of line.

Andrew Tyrie, Tory chairman of the cross-party banking commission, described this period as a "crucial time" in attempts to draw up a new legislative regime for firms in the City.

"What we are needing is a sharp, cultural change by regulators, almost as much as we require it of banks, away from box-ticking, back-covering, to a much more judgemental approach," he declared.

The claim that RBS deliberately put pressure on smaller businesses for financial gain has lent a new urgency to the debate over regulation.

Clifford Chance are currently looking into the allegations made by Lawrence Tomlinson, an adviser to business secretary, Vince Cable.

With the public temper high over these latest suggestions of misconduct, the banking sector is clearly going to need to take serious steps to recover its position in the UK and avoid facing further media scrutiny.

Fiona Woolf, the newly-appointed Lord Mayor of London, has promised to help bring British financial services into the 21st century.

Writing for City AM, she said: "London must ensure that its great cluster of services can capture the benefits of a diverse and wide talent pool at all levels, for the innovation that will enable it to meet the changing needs of business, markets and investors."

Given recent revelations, it is clear that corporate responsibility must be part of this shift.