Sunday, 1 March 2015

Observer Letter:changing the banking culture

Your "Business Leader" last week focussed on the "mudslinging the bankers would have been preparing for" in the build-up to "this year`s bonus round". (Who would want to be a senior banker now that bonus season has begun again?22/02/15) Hardly unexpected, one would imagine, in view of the banks` "wrongdoing" over the last twelve months, which culminated with the revelations surrounding HSBC`s active involvement in tax avoidance and evasion. Enough about Stuart Gulliver`s travails!
    The article suggested that bankers "have only themselves to blame for this febrile atmosphere", but isn`t that exactly the point, and the reason the country has been forced to endure years of a corrupt banking culture? Bankers don`t do blame, and clearly do not care one iota that their actions have brought disgrace to their profession. The CEOs may well come out with the usual resolutions about ethics coming before profits, and behaviour matching public expectations, but the mis-selling, rate-fixing, money laundering and tax evasion have continued unabated, with fines only accounting for a few days` profits. Nonsense spouted about "death spirals", and "best people" leaving the country, unless obscene bonuses are paid, will no doubt, again hit the headlines.

    The conclusion of the article, that because of the trillion pound bail-out and the £375bn from quantitative easing, politicians owe it to us to "hold bankers to account" is incontrovertible, but hardly original. Labour is intent on taxing bonuses more at least, but why a more radical approach is not being adopted, to match the electorate`s mood, is difficult to comprehend. The EU`s financial transaction tax comes into operation next January, so a Labour government`s pledge to participate would seem a no-brainer. However, if changing the banking culture is a priority, a fully nationalised RBS, funded by QE or real-interest free loans from the Bank of England, re-staffed with people interested in customer satisfaction, not their bonuses, and with all profits going to fund the NHS, and re-named the People`s Bank, seems the obvious answer.

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