The Sterling Crisis: Co-op shuns speculation profits: Banking ethics
Saturday 19 September 1992
The bank willingly turned its back on the millions made on foreign exchanges this week in a clear attempt to maintain the moral high ground in the City of London.
It resisted the temptation on Wednesday to 'do a billion' with the expectation of a quick pounds 50m profit as the Bank of England vainly tried to hold sterling's value. The bank's six foreign exchange dealers were told to balance their books and then sit tight.
Terry Thomas, managing director, said the decision to opt out was taken at an early stage. 'We felt it was wrong for a British retail bank to use our customers' deposits to speculate against our own economy. The enormous profits that you have seen bank dealers celebrating were almost certainly made at the expense of the tax-payer as represented by the Bank of England,' he said.
Mr Thomas admitted that there was a fine line between 'hedging' and 'speculation'.
'We were not in the business of searching around for every extra pounds 100m we could get our hands on to put against the Bank of England's virtual guarantee of making money,' he said.
The move not to speculate was part of the Co-op's ethical policy developed in the era of customers' charters and demands for access to information about corporate activities.
Co-op account holders will not see their money used to support a variety of undesirable ventures from the manufacture of torture equipment to money laundering for drug trafficking or tax evasion.
The bank said it was committed to tell customers what policy decisions were being made. Its Customer Charter already has strict rules about response to credit status inquiries and firm guidelines on confidentiality. Mr Thomas said the ethical policy meant the bank would seek out commercial enterprises with a similar stance and would encourage customers to take a positive stand on the environmental impact of their own activities.
'Customers of British banks should ask themselves and their banks 'Did I speculate against the pound last week?',' Mr Thomas said.
- 2 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 3 University student in court for allegedly covering housemates' food in window cleaner and spit
- 4 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...
£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...
£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...
£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...