February 11, 2013 - The internal auditing process at British banks should be tougher in the aftermath of the global economic downturn.

That is according to Andrew Bailey, executive director of the Bank of England (BoE) and managing director of the Financial Services Authority's Prudential Business Unit, who has labelled the present regulations relating to this area as insufficient.

Speaking after the BoE and FSA today (11 February) announced their support for a consultation paper by the Chartered Institute of Internal Auditors - which puts forward proposals that would see these rules tightened up - Mr Bailey said changes are needed sooner rather than later.

Both the BoE and FSA "strongly believe" that overseeing an effective internal auditing function is a crucial part of any financier's corporate governance structure.

Mr Bailey noted that the expectations of these processes have "hitherto been set too low".

"The regulatory authorities expect firms to have robust internal audit functions capable of providing genuine challenge to management and driving improved governance, risk management and internal controls," he added.