The lack of public trust in the UK banking sector could be addressed by a Bankers’ Oath, a think-tank has argued.

The Virtuous Banking report, published by ResPublica, stated that the recent “merry-go-round of scandal and recrimination” would only cease once bankers embraced professionalism and committed to clear ethical standards.

ResPublica said that despite five years of industry reform and regulation, small business were struggling to secure finance, customers were “bereft of good advice” and confidence in the banks was at an all-time low.

The report claimed that policy makers’ focus on reform should be switched from legislative measures to promoting virtues in banking institutions. A Bankers’ Oath was one way of encouraging higher levels of personal responsibility, ResPublica maintained.

The report also called for more diversity in the type of companies operating in the banking sector and a greater focus on customer satisfaction targets, rather than just profit or shareholder returns. It added that small businesses should be reclassified as ‘consumers’ to ensure that banks treated them fairly.

Phillip Blond, director of ResPublica, explained: “As countless scandals demonstrate, virtue is distinctly absent from our banking institutions. Britain’s bankers lack a sense of ethos and the institutions they work for lack a clearly defined social purpose.

“In order for us to have the banks we desperately need and the country deserves, bankers must recognise the good, do the good, and be good. The Bankers’ Oath represents a remarkable opportunity to fulfil their proper moral and economic purpose, and finally place bankers on the road to absolution.”

However, speaking at the report launch yesterday, Sir Richard Lambert said that it was still “debatable” whether such an oath should be introduced at this stage.

Lambert, who last year carried out a review into banking standards, noted that the ResPublica report was “full of good ideas”, but said that there should a focus on training, qualifications and organisational ethos before pushing forward with an oath.

Lambert is in the process of establishing the Banking Standards Review Council, which aims to be operational by the end of the year.

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