FACTBOX - Bank governance review recommendations

(Reuters) - A review for the British government has made 39 recommendations on how banks and other big financial institutions should be governed in a bid to avoid another credit crunch which has been partly blamed on poor bank governance.

The review was conducted by David Walker, a former chairman of Morgan Stanley International bank and aims to improve the quality of boards so they challenge risky behaviour by senior bankers.

Walker said no new legislation is needed and that the recommendations could be included in the existing code on corporate governance enforced by the Financial Reporting Council.

It will be up to the UK government in whether any recommendations will be taken forward once they are finalised in November.

The review recommended:

BETTER RISK MONITORING

-- the board of a bank should set up a board risk committee separately from the audit committee and chaired by a non-executive director;

-- risk committees to have power to scrutinise due diligence and if necessary block big transactions;

-- the chief risk officer should have a company wide authority and independence, with tenure and remuneration determined by the board;