A new City think-tank is urging the Independent Commission on Banking to consider introducing "risk reports" for banks so that non-executive directors (NEDs) can have their own independent assessment of risk factors.
The New City Initiative, a group of leading independent asset managers, has written to the ICB with its suggestion that NEDs should appoint their own outside risk assessors – rather like an audit – to give them a clear idea of the build-up of risk on a bank's balance sheet.
Daniel Pinto, head of the NCI and Stanhope Capital, said: "If non-executives could hire their own specialists to give them an independent view, it would improve governance. It should be written in words that people understand and made public. At the moment, too many banks report jibberish and hide it away on page 58 of the annual report. This would help transparency and give NEDs the chance to ask all the right questions." The ICB is due to report its suggestions for reforms to the structure of banks on 12 September.