Wednesday, June 19, 2013

Eloquence in Changing Banking for Good

The UK Commission on Banking has produced its report Changing Banking for Good.  It's too close to my day-job for me to blog about it extensively and I haven't had the chance to read it in detail.  But I can't resist quoting this paragraph:
"One of the most dismal features of the banking industry to emerge from our evidence was the striking limitation on the sense of personal responsibility and accountability of the leaders within the industry for the widespread failings and abuses over which they presided. Ignorance was offered as the main excuse. It was not always accidental. Those who should have been exercising supervisory or leadership roles benefited from an accountability firewall between themselves and individual misconduct, and demonstrated poor, perhaps deliberately poor, understanding of the front line. Senior executives were aware that they would not be punished for what they could not see and promptly donned the blindfolds. Where they could not claim ignorance, they fell back on the claim that everyone was party to a decision, so that no individual could be held squarely to blame—the Murder on the Orient Express defence. It is imperative that in future senior executives in banks have an incentive to know what is happening on their watch—not an incentive to remain ignorant in case the regulator comes calling."
I cannot help feeling that one of the advantages of having an experienced preacher on such a panel is that you can get such turns of phrase!  Probably lots more examples in the report. It will be interesting to see the reaction, and what happens.

PS Have now read the whole summary (ie down to para 254). Lots of excellent stuff, though I'm not sure I agree with everything.  The section heading "Physician, heal thyself!" is a nice touch.  Let me conclude by quoting the ending:
By making constructive use of the recommendations of this Report and by supporting their spirit as well as the letter, the banks can, over a period, earn the respect of the public, and thereafter regain their trust. Everyone can be the beneficiary. Implementation of the agenda we have set out for higher standards will lead to an industry which better serves both its customers and the needs of the real economy. It will also further strengthen the position of the UK as the world’s leading financial centre. If implemented, our proposals can change banking for good.

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