ETHICS lie at the heart of what went wrong with banking. Along with greed, of course. Oh, and recklessness, and power-crazed ambition. Maybe there was a bit of envy in there too. My bank’s bigger than yours, that sort of thing. Mmm… the more one thinks about it the more difficult it is to explain what really led to the mis-behaviour in the banking industry. So what would be the benefit of a bankers’ oath?
The idea is proposed by ResPublica, an independent think-tank, which believes that an oath similar to that sworn by doctors would be a means of cleaning up the banking industry.
It was unveiled on the day that Lloyds Banking Group was fined £218 million over the Libor rate-rigging scandal and accused by Bank of England governor Mark Carney of “highly-reprehensible” conduct that might be criminal. But would an oath stop a repeat of this sort of behaviour?
Doctors can be struck off, but so can company directors. A lot of laws already exist that are designed to prevent criminal activity in the financial services sector: fraud, insider dealing, theft, and so on. But they still go on.
An oath, or a code of conduct, exists in many professions. Lawyers, estate agents and the media have them. Draw your own conclusions about how effective they are.
They comprise an informal rule book which issues admonishments rather than formal punishments. The main penalty for breaching a code or oath is losing face and respect among one’s peers.
For the sternest critics of the banking industry’s biggest miscreants an oath will be seen as a poor substitute for custodial sentencing. The problem with that is the failure of some to distinguish between incompetence and greed – which are not illegal – and fraud, which is a serious offence.
The scandals that beset the industry were a mix of the two, which is one reason why it has been difficult to prosecute. Another is that it is not easy to prove whether a failure in the system was deliberate or not. This oath will not stop bad behaviour, and it should be noted that in many instances the bankers were only doing what they thought was expected of them. For instance, selling payment protection insurance. In a dog-eat- dog world, one man’s bad practice is another man’s means of gaining the upper hand.
Standard Life has no plan for London HQ
STANDARD Life’s warning that it might relocate its head office in the event of a vote in favour of Scottish independence has got the property world in a spin over where it might go.
It has resulted in at least three reports: one in the trade press, a second in an online publication and a third in a London daily yesterday, speculating on a move to London’s Square Mile.
The rumours were given weight by the apparent structure of a deal by the company to acquire 100 Cheapside, indicating that it would suit an owner-occupier.
Standard Life does not comment on any property deals until they are completed, but yesterday the firm broke its own rules by saying it was not looking for a London headquarters.
The company manages about £10 billion of real estate assets around the world and the Cheapside property is just another one.
Besides, Standard Life already has a London base – three floors of the Gherkin, which has just gone up for sale. Let’s hope this does not spark more rumours.