The collapse of bankers' self esteem

 
City of london

There is something a bit odd perhaps about the banks setting up a new body to ensure that their people are following high professional standards and treating customers properly.

On the one hand, it won't be the arbiter of whether individuals have breached banking standards - because the City watchdog, the Financial Conduct Authority (FCA), will soon announce how it intends to exercise those powers (having been urged by the Parliamentary Commission on Banking Standards to draft a new "single" set of banking standards to be followed by all).

But it will develop codes of conduct that are somehow aligned with, but presumably not duplicative of, the FCA's new standards. It will assess the training programmes of banks and third party providers for their appropriateness and fitness. And once a year it will present its findings to the boards of each bank on whether ethical behaviour is - or is not - at the heart of the respective banks' culture and practices

It is all about providing greater confidence to us that we are being treated decently by the banks.

Start Quote

You would not expect Tesco, Sainsbury and Asda to set up an independent body to tell them how to provide confidence to their customers that they're not being ripped off”

End Quote

But in most industries, treating customers well is a competitive issue.

For example, you would not expect Tesco, Sainsbury and Asda to set up and fund an independent body to tell them how to provide confidence to their customers that they're not being ripped off.

So the appointment of Richard Lambert, the former FT editor and ex-director general of the CBI, to set up this new monitor of bankers' behaviour shows just how low bankers' self-esteem has sunk.

Apart from anything else, it is less than a couple of years since the UK's eight biggest banks set up the Professional Standards Board of the Chartered Banker Institute to "support the ethical awareness, customer focus and competence of those working in the banking industry" and "build, over time, greater public confidence and trust in individuals, institutions and the banking industry overall, and enhance pride in the banking profession".

Does the decision of the banks to finance the Lambert Plan show that the banks have written off that earlier initiative as a dead loss? That is unclear.

But they clearly don't believe it is sufficient to restore their public standing.

So what is the big conspicuous difference between that Professional Standards Board and the Lambert model?

Well the Professional Standards Board is governed, at the top level, exclusively by serving bankers. Whereas Lambert has insisted that no senior active bankers will be on his board - though three out of the 10 members would be recently retired bankers or independent non-executive directors of banks (the others would include a consumer voice, a trade unionist, an accountant, an investor, a small business person, an academic and even - oh dear - a hack).

Which probably tells you all you need to know.

However bankers do have to be wary of one thing.

Customer service and reputation for fair dealing is a competitive issue. And in an industry historically notorious for collusion, the bankers have to be careful that Lambert isn't seen as a veil for a collusive attempt to persuade all of us that the biggest banks are all much of muchness when it comes to conduct, thus deterring us from shopping around for the best and most sensitive customer service.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +1

    Comment number 413.

    I have no issues with the ones working at the coalface - the tellers, counter staff etc... But the sharks at the top who award themselves huge bonuses despite their overseeing an industry that caused untold misery - I WANT TO SEE SOMEONE GO TO PRISON! We all want to see heads roll and the public perception will not change until this happens.

  • rate this
    0

    Comment number 412.

    365sheeple
    Please don't miss quote me, many of have written papers on the level of fraud. As I have already stated, there is no deniability!
    ~
    I am afraid you misquote yourself.

    1. You post there is evidence of crime
    2. Then you post you have no evidence but there are academic papers written about it.

    There is your contradiction. Can you not see that?

  • rate this
    0

    Comment number 411.

    @387 Connor
    Think you are stretching credibility a leeeetle bit to suggest that ALL low paid in US who took out mortgages, especially early on:
    -Dealt with an incompetent or crooked broker
    -Deliberately overborrowed or
    -Could not work out their financial circumstances
    -Could predict the economic future of their community/State & their employment

  • rate this
    0

    Comment number 410.

    Will the Bankers be praying to Mammon this Saturday or Sunday?
    As they bow before their Golden Calf.........

  • rate this
    +1

    Comment number 409.

    Performance-related pay, bonuses, together with short-termism and the blurring between the high-risk activities and the solid, safe types of activities have led to this. If they want to improve things, they need to reverse what has been happening over the past 30 or so years (though keeping the technology up to date, etc) so that employees value their jobs and have fixed salaries, not commission.

 

Comments 5 of 413

 

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