I went to a Policy Review Summit
yesterday, focused upon rebuilding trust in the banking system.
We’ve had a few of these meetings at the Financial Services
Club, and have two more in May, and the discussion usually comes around to a
number of core themes:
- customers trust their bank accounts to be safe, secure and
reliable, they just don’t trust bankers to do the right thing
- rebuilding trust will be hard as it arrives on foot and
leaves in a Ferrari
- trust is a cultural focus that cannot be forced or
regulated – it’s all about what you do when nobody is watching and about doing
the right thing for the customer, the company and society
- trust will only be gained when the old system has been
- banks need to shift from a pure shareholder focus to a
Many of these themes came up yesterday as the great and the
good of the City debated how to rebuild trust.
Panellists and keynotes included:
- Andrew Bailey,Deputy Governor of the Bank of England and
Chief Executive, the Prudential Regulation Authority
- Chuka Umunna MP, Shadow Business Secretary
- Ashok Vaswani, CEO Retail & Business Banking, Barclays
- Saker Nusseibeh, Chief Executive Officer, Hermes
- Richard Sexton, Reputation and Policy, PwC
- Mike Cherry, National Policy Chairman, FSB
- Jane Archer, Policy Director, London First
- Patrick Jenkins, Banking Editor, Financial Times
- Howard Miller, Director, TheCityUK
- Christine Farnish, Chair, Consumer Focus
The whole show was kicked off by Chuka Umunna, closely
followed by a panel comprising Ashok,
Saker, Richard and Howard debating different aspects of trust, and then Mike, Jane,
Christine and Patrick.
Panellists Saker Nusseibeh, Ashok Vaswani and Chuka Umunna at the ready for the start of the show …
The only thing that surprised me in the whole process was the
fact that almost all the panellists, including the banker, said that those who
caused this massive loss of trust must be brought to account and jailed.
Jail the banksters was the meme I took away from the day.
It began with Chuka saying:
respect of the LIBOR rigging scandal, it seems to me that we will not rebuild
trust with the public or affect a culture change in finance until custodial sentences
are imposed on those guilty of criminal wrongdoing in your sector. It
cannot be right that someone who seeks to cheat the benefits system out of a
couple of hundred pounds in my constituency may well be thrown into jail for
doing so, but those who seek to rig the financial system and receive hundreds
of thousands of pounds as a result never seem to suffer the same fate. Is
not the prospect of jail for gross wrongdoing one of the best ways we can
affect a culture change?
Ashok built upon this, and questioned the purpose of a bank:
“a bank is not here purely to make money but should be about helping people
achieve their ambitions”.
Saker underscored that the issue of losing trust was due to
individuals being able to amass wealth without accountability, a view
corroborated by Andrew Bailey who made it clear that a bank CEO and management
team cannot delegate responsibility.
There was then an amuse bouche as Ashok and Chuka got into a
debate about why Barclays released news of their bonus pot on the same date as
the Chancellor’s Budget. Was this
knowingly trying to sneak bad news into public domain when Barclays knew it would
get no coverage due to the bigger news of the day?
Ashok at least had the humility to admit it was a mistake.
Then we started to get this meme going about jailing banksters.
As mentioned, Chuka had raised this in his speech, but a
question from the audience honed the focus down: surely we cannot rebuild trust
in banking until the toxic brand of banks has been cleaned and you can only
achieve that through a wholesale cleanout of the industry, including jail
sentences for those who committed wrongdoing?
All the panellists agreed.
In fact, it appeared that they would not see the industry
move on until some public sacrifices of wrongdoers are made.
Fred Goodwin, James Crosby?
The public and media want blood and the LIBOR riggers are
the lambs that need to bleed.
A whole lot more was said – checkout the conference twitter stream for more – but this was my takeaway from the
day. Meantime, here are three useful
links if you want to know more: