Sir David Walker’s review of banks’ corporate governance is likely to call for a dramatic increase in the power of risk committees.

Sir David is set to publish on July 16 his initial views about how banks’ managements should be shaken up in an attempt to avoid a repeat of the financial crisis.

The City grandee, who was previously international chairman of Morgan Stanley and a director of the Bank of England, may call for it to be compulsory for banks to have board-level risk committees, made up of non-executive directors.

He may also suggest that a bank’s chief risk officer should sit on the main board. Although some major lenders have board-level risk committees, others do not, with their audit committees handling many issues relating to risk. No large bank gives a board position to its head of risk.

Proposals to strengthen the power of those in charge of risk may resonate with critics of the way in which banks were run during the boom years, with dominant chief executives discouraging dialogue about risk so that they could pursue their goals of rapid expansion.

However, some in the City may argue that the UK concept of the “unitary board”, which is expected to have an overview of the entire business, could be undermined if the person specifically focusing on risk is a director.

They may also argue that a bank’s audit committee is capable of monitoring risk at a high level, with the detailed work done by members of the management team.

Sir David is likely to say that non- executive directors should devote more time to companies, in a move that is likely to see their pay go up. He may reinforce the view of the Government and the City, that because banks are so complex, they need at least some non-executive directors to be experts in finance. Some banks have told him that the rule should not apply to all their non-executive directors because it is valuable to draw on a wider pool of expertise.

The Treasury in February asked Sir David to review banks’ boards and pay policies in the wake of public anger at bankers over the financial system’s crisis and taxpayer bailouts of banks.

On pay, Sir David is expected to say that bonuses should be subject to clawbacks, paid out over a number of years and more heavily geared to share awards rather than cash payments.

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