Banks have joined tobacco and gaming companies as the least desirable destinations for non-executive directors, with City grandees fearing that involvement in the financial crisis will cost them their reputations.

Leading headhunters said that they were struggling to find non-executives without financial expertise willing to join bank boards. Yet demand is expected to rise for ex-bankers and accountants, as banks and insurers increase the financial expertise of their boards.

Peter Waine, director of Hanson Green, a boutique company that specialises in non-execs, said: “We're already detecting a slight difficulty. There's no problem if it's a mutual — we just did a large mutual and we were overwhelmed with the quality of the applicants — but we're finding financial services generally a little more difficult.”

Krystyna Nowak, Mr Waine's fellow director, said: “People used to say: 'I won't do gaming or tobacco.' But now they say that they don't want financial services, either.” She said that many feared damage to their professional reputations: “If a company goes badly wrong when someone's there as a director or non-executive, it stays with them.”

Extra cash is also unlikely to lure people without a financial background on to bank boards. The median basic fee for a non-executive in the FTSE 100 is £58,675, and £40,700 in the FTSE250, a survey by Deloitte found. However, a remuneration consultant said: “A 20 per cent pay rise won't make a difference if people think that the level of stress, responsibility and the possibility of unforeseen circumstances arising is so much higher.”

Betty Thayer, deputy chairman of exec-appointments.com, said that banks would look for financial expertise in new non-execs. “I suspect that there'll be a significant replacement of non-execs over the next 18 months, with the banks wanting stronger skills in credit markets and risk.”

The boards of Northern Rock and Bradford & Bingley, the nationalised banks, included non-execs with extensive financial experience. Nichola Pease, chief executive of JO Hambro Capital Management, the fund manager, sat on Northern Rock's board. Michael Buckley, the former chief executive of Allied Irish Bank, is on B&B's.

Bankers are split on whether loading boards with people with banking expertise would help. One said: “Look at B&B — the chairman's been in the City all his life, while the Rock's chairman was a scientist. Lehman [Brothers] was run by a bunch of people who's worked in banks their whole lives. I'm not convinced that everyone has to have a financial services background.”

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