Community
When George Osborne, Chancellor of the Exchequer, said of the Parliamentary Commission on Banking Standard’s (PCBS) report, ‘Changing banking for good’ which was set up to right the wrongs of the financial crisis, that “I am pleased to say that the government will implement its main recommendations”, I was still apprehensive.
I thought the Committee did a good job of identifying where weaknesses lay in the system and providing possible solutions to them. My concern is that Osborne introduced a caveat into his speech at Mansion House. The word “main” gives him room to manoeuvre.
Anyone who watched Paul Volcker’s testimony to the Commission on the subject of ring-fencing can be in no doubt that experienced legislators consider banks to be the masters of regulatory erosion. The recent proposal to reintroduce the Glass-Steagall Act in the US, 13 years after its eroded base was repealed and another financial crisis washed over us, is indicative of how fixed laws must be to overcome some of the worst excesses that the finance industry is capable of.
Nevertheless some key points that the government is seeking to enforce are the potential imprisonment of individuals guilty of reckless behaviour, and standards of behaviour. I don’t think that these will necessarily be enforceable, but I do think they may be necessary to create a culture in which senior staff are conscious of their behaviour.
The Chartered Institute of Bankers at one time provided a qualification, and the threat of disqualification, for bankers. At the turn of the millennium it shed its responsibility in this regard and that left bankers operating in a vacuum. It may have been an ‘Old Boys club’ in some respects but it fostered a sense of community amongst bankers that went beyond their own organisations.
When that was taken away and qualifications were set by the banks themselves, the only environment that existed for bankers was the corporate environment and the profession lost something of its pride. Unqualified chief executives took the reins and disaster ensued. Putting some stick about might keep people a little more mindful in the future.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Azimkhon Askarov Co-partner at CONCRYT
02 September
Edvards Margevics Co-partner at CONCRYT
30 August
Ellen Roberson Global Marketing Advisor, Risk, Fraud & Compliance at SAS
Patrick Bermingham CEO at Adflex
29 August
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