2 December 2013

Banks - Still Unworthy of our Trust

Several more issues have come up over the last couple of weeks which show how banks are still way off being the organisations we need them to be.

First there's the Co-op Bank problems at the top (very sad, when many people saw them as offering a more ethical approach), then there's the allegations about RBS closing down small businesses because they wanted their money back, and finally the news that bankers' bonuses are once again on the rise now that the public's attention is elsewhere.

I suspect that, as Robert Peston points out, RBS will say that they were caught in the middle between the regulator telling them to reduce their outstanding debts (including money lent to small businesses), and the government telling them to lend to more new small businesses. But I can't say that I feel any sympathy when it basically comes down to their earlier reckless lending policies.

And as for bonuses (thanks again to Robert Peston), one wonders what world some people live in, and what it will take to get them to see some sense.

Last July (2012), when commenting on the Barclays LIBOR-fixing scandal I concluded with the following which still applies perfectly. Sometimes it's sad to be right...

I suspect that there are many similar situations in the financial world, and only when something goes publicly wrong or is somehow brought to light will we all be outraged yet again.

What is needed is a responsible and ethical culture. But that needs more than a quick staff training course. It's a question of changing attitudes and culture. And that takes time. The sooner that individual financial institutions have less of an impact on all of our lives the better. They are currently hardly worthy of our trust.

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