Anthony Hilton: Changing the bank rules won't help. It's leadership we need
There are more rules than ever governing banking today
Saturday 07 July 2012
It's been a week of disgust with the bankers and demands for more regulation. Nothing new there then. But it is a pity that more of those who think more rules will make bankers change their ways could not have been present on Monday evening at a Tomorrow's Company event. The speaker was David Pitt-Watson, a fund manager with Hermes, and he asked the very pertinent question: "What is regulation for?"
The answer obviously is to deliver better behaviour, but his point was that rules don't encourage better behaviour; they simply encourage compliance with the rules. They lower rather than raise people's sights. They erode rather than encourage ethical behaviour. They stop people asking themselves crucial questions about whether they are doing the right thing and substitute instead whether they are doing what is allowed.
There are more rules than ever governing banking today, so why should we believe another tranche will make a difference? Almost every banking crisis since the Second World War has brought forth a new Banking Act so that it will never happen again.
Yet from the client's perspective, the conduct of the average banker in the City is significantly less ethical and trustworthy today than it was before Big Bang in 1986 and the passing straight after it of the first Financial Services Act. So there is a lot to be said for Mr Pitt-Watson's thesis that we need to concentrate instead on creating institutions which encourage and support good behaviour and aspire to recreate the values worthy of a profession.
We should recapture the ethos of the time when the customer came first and the banker did what his experience and judgement taught him was best for his client.
However, institutions can take us only so far. What is really missing in banking, and in much else of public life, is leadership. Tone from the top is what matters most. Too few bankers in recent times have been willing to display by actions, words and policies, and by refusing to indulge in to the bonus culture, that they really do believe the customer comes first.
There still are people like this, Stephen Green, formerly at HSBC, and Mervyn Davies ex-Standard Chartered, are two from the recent past. No surprise then that these are the banks to emerge least tainted by the debacle of the last few years.
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 iOS 8 apps and features: eight iPhone settings you need to look at after you install the update
- 3 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 4 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 5 Scotland could still declare independence – even without referendum, says Alex Salmond
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Khorasan: Muhsin al-Fadhli - the man leading a terror group more feared by US officials than Isis
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks own nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...