(MENAFN - AFP) Britain's finance minister George Osborne on Wednesday urged lawmakers to support plans for costly structural reform of the country's banks to avoid a repeat of the 2008 financial crisis.
Chancellor of the Exchequer Osborne's plea came as he appeared to back the creation of a professional standards body to oversee behaviour by British lenders including Barclays, HSBC and state-rescued Royal Bank of Scotland.
"I would be very wary of unpicking a consensus that has been arrived at" over reform of Britain's banks, Osborne told the Parliamentary Commission on Banking Standards.
The Commission is a scrutiny panel composed of lawmakers from parliament's upper and lower houses, as well as Bishop of Durham Justin Welby -- who was named earlier this month as the next Archbishop of Canterbury.
"We have spent two years getting to this point. We are on the verge of introducing ground-breaking legislation. I don't think this is the point at which we want to say, let's go back to square one," the Chancellor said.
Set up by Osborne, the Commission is looking into banking standards and culture in the wake of the Libor rate-rigging scandal that has rocked Barclays.
The finance minister is now concerned that the Commission could seek fresh wholesale recommendations for reform of the nation's banking sector.
Conservative lawmaker and Commission chair Andrew Tyrie told Osborne however that members did not find it "very convincing to be told that we should be 'wary of unpicking a consensus'".
He added: "Just because something has achieved a consensus does not necessarily mean that it is right. It is our job to take a look at it."
Osborne meanwhile acknowledged that more needed to be done in the wake of the Libor scandal.
"I hope this Commission would look at other issues, like the standards we expect of the profession and how, for example in the medical profession and the teaching profession, we expect certain standards and those standards are administered by the profession often, but how we can create something similar in the banking industry," he said.
The Libor scandal erupted in June when Barclays bank was fined 290 million by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
The Barclays affair led to the resignations of three leading Barclays executives -- chief executive Bob Diamond, chairman Marcus Agius and chief operating officer Jerry del Missier.
The Conservative-Liberal Democrat coalition has backed the recommendations of the Independent Commission on Banking, which was chaired by ex-Bank of England chief economist John Vickers.
Central to the changes are plans to "ring-fence" the retail operations of lenders and to require them to hike their capital reserves -- all by 2019.
Britain's banks were facing radical change to avoid a repeat of the massive state bailouts of lenders, including also Lloyds Banking Group, in the wake of the 2008 financial crisis.
Osborne wants British banks to increase their capital buffers above levels decided under the international Basel III agreement.
Vickers last year estimated that the annual pre-tax cost to lenders of the reforms would total between 4.0 billion and 7.0 billion (6.4 bilion and 11.2 billion, 5.0 billion euros and 8.7 billion euros) a year.
Analysts said the higher charges risked being passed on to clients.
Britain's financial watchdog has meanwhile vowed to overhaul the Libor system that has damaged the financial sector's reputation and threatened to imprison those who abused it.
Barclays is the only bank to have been fined over Libor, but it is understood that at least 15 lenders globally are being investigated for potential rate manipulation.
The London Interbank Offered Rate, or Libor, is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. Euribor is the eurozone equivalent.<