LONDON (Reuters) – The financial sector needs to do more to root out and register “bad apples” but it would be difficult to licence wholesale banking as a profession and unclear if doing so would prevent further abuses, the banking industry said in submissions to a British review of capital markets.
The response from the Market Participant Panel to the Fair and Effective Markets Review established by British finance minister George Osborne was published on its website early on Friday.
Recommendations by the panel broadly focused on the need to improve internal codes of conduct for fixed income, commodities and currency trading (FICC), rather than recommending heavier outside regulation of banks, investment funds and other businesses.
The review was launched last year by regulators and the British government, worried that revelations about the rigging of interest rate and currency market benchmarks would undermine London’s role as a financial centre.
“We do not consider that FICC markets are fundamentally or irretrievably broken and in need of significant structural reform,” the panel said.
“Competition is fierce. However, competitiveness can be subverted by how people work in practice. Hence the heavier emphasis in our submission on behaviours, standards and guidelines for good and best practice.”
It said that the Financial Conduct Authority’s Approved Persons Register, which now includes many but not all bank and fund traders, should be developed to allow more swapping of information between companies on past or future employees.