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The Fourteenth Banker

A friend in the USA sent me a link to the Huffington Post’s story about the Fourteenth Banker.

This is a new blog, started last month, by a senior XVP in a Top Ten US Bank that has been using TARP funds.

Why has he called the blog the Fourteenth Banker?

The name is based on two tales.

The first tale is The 13 Bankers by Simon Johnson and James Kwak. I hope they don’t mind being so prominently mentioned. There is no affiliation, except that they and I, and some of you, are living in these times and responding to the them. Their tale, a history, is about banking, where it came from, what it came to, what it could be and how it was hijacked. I encourage you to read this book. You will find it liberating because transparency and truth are always liberating. We think that power has been taken from us, but it is easily enough taken back, if we realize that we are free to choose. We will discuss how we come to feel free.

The second tale is that from a southern university. It is the story of the 12th Man at Texas A&M. The 12th at Texas A&M was an “everyman” who was there to support his team. When needed, he stepped out of the masses, donned the uniform and joined his team on the gridiron for the battle. For this to be a useful metaphor we have to decide several things. Who do we stand with? What crowd? What common interest? What motivates us to step out? Is it our own greatness? I hope never. Courage and conviction are more than enough. We don’t need any more “greatness” in this industry. How many of the “greats” have fallen? What is the battle about? Much more than a sporting event this time. Who is our opponent? A heavy favorite no doubt. Overwhelming. Invincible. At least that is how they appear. Is the opponent strictly a separate person or entity or is it something we must excise from ourselves first?

Perhaps The Fourteenth Banker will become a symbol, much like the 12th man.

And why is the blog worth reading?

I guess that’s answered by the Huffington Post’s interview with him. They introduce the interview with these lines:

‘The system is built to be gamed.’ ‘The voices of dissent are not being heard.’ These are the words of an anonymous executive at one of America's 10 largest banks, who after many years of watching the worst of Wall Street's ethics transform his company, has decided to speak out …

At the heart of the executive's moral crisis is his bank's compensation structure, which has come to resemble the pay schemes of bank trading operations. Though he hasn't been explicitly told to stop making loans, he says the retail banking industry's compensation systems have come to put an outsized emphasis on selling fee-based products (think credit cards) and acquiring deposits. In other words, it no longer pays for him to actually lend money.

Here’s a brief summary of the interview itself (for the full monty, click here).

Question: What is your job at the bank?

Answer: I deal [in] traditional bank branch activities, commercial lending and lending to businesses below the large corporate level.

Q: why did you choose to speak out now?

A: I decided that I cannot live with the extent of the compromises to my value system. My choices then are to leave or to try and change things. But when you leave, then you leave behind the system intact, you leave behind your customers, your fellow employees and you leave behind the system. The reason I'm choosing to speak out now is that neither of those are acceptable choices to me.

Q: Was there a specific moment that prompted you to speak out?

A: With my particular organization in the last few years, there has been change in management and … the Wall Street mentality has been pushed into the traditional bank, and it's not always welcome there. It's welcome to the extent that people can make a lot money, but it's not welcome to the extent that it becomes all about money.

Q: How has that impacted your bank’s relationships with clients?

A: I've sat with people been who've been deflated. They'll say, "Why are you kicking me when I'm down? 2009 is the one year in which I have had really bad results which, by the way, big bank, you had bad results too, and yet you're in the position of power and you're kicking me when I'm down?" That's a natural human reaction… but those kind of conflicts are now coming up more often then they should.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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