(10 February 2009 – UK) The British Treasury has announced that it will conduct an independent investigation into the management of British banks.The treasury announced a review to recommend measures to improve the corporate governance of UK banks, particularly with regard to risk management.
British banks have been accused of exacerbating the global financial crisis because of excessive risk taking.
It will examine board management of risk (including the effectiveness of risk and audit committees) and incentives to manage risk in bank remuneration policies.
The review will also examine the competences needed on bank boards, board practices and structures, and the role played by institutional shareholders.
The review is being chaired by the former financial services regulator, Sir David Walker. Walker is currently a Senior Advisor at Morgan Stanley International.
Chancellor of the Exchequer said that it is clear that corporate governance should have been far more effective in holding bank executives to account.
Business Secretary, Peter Mandelson said that the review is needed to ensure that the country has competent, well-run and transparent boards, which are engaged with their shareholders, and capable of understanding and managing risk effectively.