Former Ofcom Chief To Lead Bank Body Overhaul

The former head of the media regulator is to spearhead a plan to overhaul the myriad trade associations which represent Britain's beleaguered banking industry.

Sky News has learnt that Ed Richards, who stepped down as chief executive of Ofcom at the end of last year, will be named on Friday to his first major post since leaving the regulator.

Mr Richards' role will be a significant one as the UK's big banks seek to rationalise the plethora of bodies which lobby on their behalf across issues as wide-ranging as European bonus caps and mortgage lending rules.

The project was initiated by the chairs of major lenders including Barclays, Lloyds Banking Group and Royal Bank of Scotland amid a growing sense of frustration about the duplication provided - and fees charged - by dozens of organisations.

Antonio Simoes, who runs HSBC in the UK, has been leading the process of recruiting a senior independent figure to oversee the review, which will encompass bodies such as the British Bankers' Association, the Payments Council and the Council of Mortgage Lenders.

Mr Richards, who ran Ofcom for eight years, is seen as an ideal person to lead the working group on banking trade bodies because of his experience as a regulator.

A statement confirming his appointment will be issued on Friday, according to insiders.

One source likened his role to that of Sir Richard Lambert, who spearheaded the establishment of the Banking Standards Review Council before handing over to a permanent leadership team.

Sky News revealed in January that a series of class action lawsuits over the Libor rate-rigging scandal had been acting as an obstacle to plans for a merger of the banking sector's leading trade associations.

Some of the BBA's directors had raised concerns about the legal implications of a consolidation which would be aimed at helping the industry repair its image more than six years after the financial crisis swept through the UK banking system.

A consultation document published in January highlighted the option of creating a new umbrella body which would amalgamate existing associations.

A less likely possibility would be to merge bodies which currently overlap but stop short of a more wide-ranging consolidation.

"Both approaches to implementation would require a careful assessment of all potential implications on existing associations and any new association," the paper said.

"Implications on aspects such as, legal obligations and liabilities (eg pensions and debt), employees and legacy technical and policy initiatives would need to be assessed in detail.

"These would also need to be managed and factored into any new organisation's strategy and operational plan."

People close to the process confirmed that that section was an implicit reference to class-action lawsuits in the US in which the BBA is named as a defendant.

Until the Libor scandal emerged in 2012, when it claimed the jobs of top executives such as Barclays' Bob Diamond, the BBA was the administrator of it and other related benchmarks, and derived a significant proportion of its annual profit from that role.

Owing to the ongoing litigation, the BBA is unable to be dissolved as a legal entity or owned by another organisation, an insider said in January.

It is not unclear whether these issues have since been resolved.

Leading bankers and BBA executives are understood to be keen to pursue the trade body consolidation amid complaints from members that the proliferation of organisations has led to disjointed communications with stakeholders and excessive costs.

The steering committee established to work on the prospective mergers includes Les Matheson, the head of personal and business banking at Royal Bank of Scotland, and Alison Brittain, group director of retail banking at Lloyds Banking Group.

A spokesman for the working group declined to comment.