From swear words to oaths for disgraced financiers

AFTER the worst banking crash and recession since the 1930s, the financial services industry has had many questions to answer.

Curtailment of bankers' bonuses and calls for structural reform are not enough. How can bank regulation be improved? Do we need an overhaul in governance and how can it be effected?

The suggestion by fund manager Angus Tulloch is that staff in the industry should have an ethical code similar to the medical Hippocratic oath. He told MSPs investigating the Scottish banking sector yesterday that much could be done to "reprofessionalise the industry, so people behave".

These ideas merit attention. Tulloch is a leading Scottish fund manager with First State Investments, rated one of the UK's top fund managers by Trustnet.

His suggestions appear to echo the greater consideration of ethics now being allowed for in the exam papers of the Chartered Institute of Bankers in Scotland. Similar changes could be considered in the training of fund managers.

The disasters that befell Scotland's two largest banks might arguably have been less severe had institutional investors not gone along blindly supporting the RBS takeover of ABN and voting for board recommendations on remuneration. Private investors tended to be more critical. If industry professionals had taken a more responsible view on behalf of investors, confidence would not have collapsed with the severity it did.