My noble friend Lord Phillips is quite right to draw attention to the importance of integrity. Integrity lies at the heart of confidence in the financial services system, indeed, in any commercial activity. In Amendment 26D, the noble Lord seeks to insert an additional requirement about,
“the fairness and integrity of policy and conduct of those directing or operating in the financial markets”.
He needs to be aware that the significant influence function committee already checks everybody who is undertaking the sorts of roles that he considers important—which are indeed important—and does so very thoroughly. It has done so with increasing pressure and difficulty in recent years, so much so that people are now ceasing to wish to undertake these roles. They are starting to ask whether they need all the hassle, the problems and the dangers of adverse publicity from people like the noble Lord, Lord Phillips. Powers exist to give authorisation to the people who will set the tone and the philosophy that he seeks to achieve, which all of us who work in the City feel are essential and which, as he rightly pointed out, have not always been present in the past. I say to the House, and to the noble Baroness, Lady Hayter, that we must get the philosophy right. The creation of codes and more regulations will not necessarily produce the right people. We are looking for people with judgment. We rely on judgment, not on process, and as we do this we are in danger of moving more and more to a process-driven system that does not allow the exercise of judgment that will lead to the desirable results that my noble friend indicated in his remarks.
4.30 pm