Exclusive: Bank Chiefs Hold Crisis Summit

By Mark Kleinman, City Editor

The bosses of Britain's biggest banks have held a secret summit aimed at forging a blueprint to repair the reputational damage from the industry's ongoing spate of scandals.

I can reveal that the chairmen and chief executives of the six largest UK-based lenders met at HSBC's head office last Tuesday to discuss the fallout from the Libor-rigging probes which have engulfed the international banking sector, as well as the payment protection insurance and interest rate swaps mis-selling.
People familiar with the discussion say the bankers also discussed the appointment of a successor to Marcus Agius as chairman of the British Bankers' Association (BBA). Mr Agius quit earlier this month following Barclays' £290m fine for attempting to manipulate the interbank borrowing rate Libor.
I understand that the bank chairmen and chief executives made a tentative decision to seek to appoint an outsider as chairman of the BBA for the first time. A list of potential candidates, likely to include retired bankers and formal civil servants, is likely to be compiled in the coming weeks.
Typically, the role has been filled by the chairman of one of the major British banks: prior to Mr Agius, the post was held by Lord Green, the then chairman of HSBC and now the trade minister. Before Mr Green, it was held by Sir Peter Middleton, the chairman of Barclays.
Banking sources tell me that neither Sir Philip Hampton, chairman of Royal Bank of Scotland, nor Douglas Flint, executive chairman of HSBC, is interested in the BBA chairmanship, while Sir Win Bischoff, chairman of Lloyds Banking Group, is expected to retire sometime next year.
Among those who attended last week's summit were Sir Philip, Antonio Horta-Osorio, chief executive of Lloyds, RBS boss Stephen Hester, Mr Flint and Lord Burns, chairman of Santander UK.
"The conclusion was that words do not work in terms of restoring public confidence in the industry," said a person briefed on the meeting.
HSBC this morning became the latest bank to confirm the costly impact of mis-selling, saying that it had set aside £495m in the second quarter for PPI and interest rate swaps-related malpractice, as well as an initial £465m provision for an expected fine by US authorities for money-laundering activities in Mexico.
None of those who attended last week's summit were available for comment.

Posted in: World business