By Paul Moore (former senior UK bank executive, Halifax Bank of Scotland) - 7 July 2012
Of course, the Barclays affair is not the only nasty news about banking at the moment. There’s interest rate swap mis-selling to small and medium enterprises (SMEs). There’s HBOS and Farepak Christmas savings club and the way HBOS knowingly took security over Farepak depositors’ money and then took that to pay themselves back first. So what should we do about all these problems with banks and financial sector giants? We clearly have not got to the bottom of things or fixed them yet.
Although I believe there are important secular solutions that will address these problems, I am also sure that none of them will work without a fundamental moral and ethical transformation of society from its addiction to the “isms” – reductionism (only atoms and science counts), secularism, materialism, consumerism, individualism, celebrity-ism and moral/ethical relativism. These things are presented to us as all about freedom and happiness but they are, in reality, a form of spiritual slavery.
On the secular front, as I stated last month in evidence to the Treasury Select Committee in relation to its new inquiry into “corporate governance and remuneration in systemically important financial institutions”, the whole banking system is broken and needs total reform. As we have still not carried out a thorough, rigorous and transparent investigation into the causes and implications of the banking crisis, we have built our reform agenda on sand. The only way to get to the bottom of what caused the crisis – and resolve what we need to do to ensure it does not happen again – is to carry out a thorough, forensic and transparent judicial investigation as we have done in other areas of public importance, such as the collapse of Equitable Life, the decision to wage war in Iraq, and Leveson. Preferably, we need a royal commission.
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Many global companies now have balance sheets larger than those of sovereign governments. Current fiduciary duties permit (or even require) directors to focus almost all their attention on short-term profit because of the demands of the investment analysts to deliver more and more growth in shorter and shorter time frames. Driven by this short-term focus, the chief executives and their teams really have no choice but to push the boundaries of risk-taking to achieve short-term financial priorities. And, despite protestations to the contrary, it is also the case that, to hit their targets, executives push the boundaries of the civil, regulatory and criminal law and ignore the basic social ethics of integrity, fairness, compassion and responsibility.
http://www.thetablet.co.uk/article/162939
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