City mayor says financial culture needs to be controlled

By KRISTY DORSEY
Published on 16/08/2012 00:00

MORE “cultural control” is required industry-wide before the UK can regain its reputation as a trusted financial hub, the head of the City of London Corporation said yesterday.

Meeting members of Scotland’s financial services sector, the City of London Lord Mayor, David Wootton, said the excesses that led to a string of scandals must be voluntarily brought under control. This self-regulation should operate alongside stronger legal standards, he argued.

Speaking before the corporation’s written submission to the Tyrie commission on banking, Wootton said: “If you take payment protection insurance as an example, people knew they could sell this and make money doing it, but no-one seems to have considered whether this would best serve their customers, or the wider community.

“If there had been that kind of factor in the decision process, these organisations would not have been required to pay the kind of compensation they are now paying.”

Wootton – whose first official visit to Edinburgh since being elected as Lord Mayor in November also included meetings with local and government politicians – is due to sign off on the corporation’s submission later this month to the Parliamentary commission on banking standards. It is expected to include specific suggestions on practical steps to overhaul the culture within financial organisations.

That will be followed up in early October with an announcement by the corporation on its recommendations in the difficult and often grey area of governing principles.

“What we should do is not defend the indefensible,” Wootton said. “We cannot say it is just a case of a few rotten apples in the past, and that is that.”