Regular readers of this blog know that the financial services industry is characterized by opacity.
Two areas of the financial system that stand out for their level of opacity are banks (according to the Bank of England's Andrew Haldane they are black boxes) and structured finance securities (according to your humble blogger they are brown paper bags).
According to a Guardian article on Mr. Cameron's announcement,
a joint committee of MPs and peers will investigate the banking industry by the end of the year, in the wake of growing political anger at recent scandals.
Its remit will be to examine issues of "transparency, conflicts of interest and the culture and professional standards of the financial services industry including the interaction with the criminal law".
The inquiry, which will be chaired by Andrew Tyrie, the chairman of the Commons Treasury select committee, will be set up within days and will have the support of Treasury officials.
The prime minister said it would have the power to examine witnesses under oath as well as gain access to all relevant papers. It will have most of its hearings in public and, Cameron pointedly said, former ministers and advisers will be called – a reference to Ed Balls, a former economic secretary to the Treasury, and Ed Miliband, a former Treasury special adviser. "No one would like to see the shadow chancellor in the dock of a courtroom more than me," Cameron said.
The inquiry will report back by Christmas so that its proposals can form part of the financial services bill, which will implement the reforms recommended by the Vickers inquiry.I look forward to supporting Mr. Tyrie's efforts in examining transparency or the lack thereof in the financial services industry.