Show us corporate culture has changed, banks told
THE banking sector must show "contrition" for past failures and
rediscover "a culture of the virtues", the Church of England's
Mission and Public Affairs Council has said, in written evidence to
the Parliamentary Commission on Banking Standards.
The Commission was set up by MPs in the wake of the Libor
scandal in July, to look at the professional standards and culture
of the UK banking sector. The Bishop of Durham, the Rt Revd Justin
Welby, is a member of the Commission, which is composed of five
MPs and five peers (
News, 20 July).
The MPA Council's submission states: "The question is not
whether systems have been adequate to identify and deal with the
bad apples, but whether the whole orchard needs replanting."
It goes on to say that the restoration of public trust in the
banking industry "is not just a matter of technical 'fixes', but
may require public, corporate contrition for past failings,
demonstrably robust structures to ensure that old mistakes are not
repeated, and possibly some symbolic steps to assure the public
that the corporate culture has changed".
The Council says that "the culture of banking has lost touch
with matters of virtue". Bankers show a "blindness to the common
good", and are disconnected from the "concerns of a wider community
The Council issues a strongly worded attack on the "bonus
culture" in the City, in a similar vein to the Church of England's
Ethical Investment Advisory Group, which has said that there is a
"systemic problem" of excessive pay for company executives. The
Council states: "The headline salaries, bonuses and remuneration
packages of very senior bankers . . . [have] gravely harmed the
public perception of banking. . .
"It reflects a deeply felt and sound belief that what has
happened is unjust. The fact that those who presided over actions
by their banks that were disastrous for the common good walked away
with large pay-offs has simply fuelled the damaging notion that the
whole culture of banking conspires to facilitate personal greed,
with huge rewards for success and only slightly smaller rewards for
The submission goes on to argue that the perception of banks as
"friendly, family-oriented institutions" has "taken a possibly
The Council also criticises the "impersonal nature of financial
trading", which has "tended to detach trading from being a
transaction between persons and to obscure any sense that whole
communities might be directly affected by a particular
It warns about the plan to separate retail and investment
banking if it creates "an ethically mature and consumer-friendly
retail sector sitting alongside an even less well regulated and
socially irresponsible investment banking sector than in the
And it urges the Commission to look at ways to "restore the
human scale of banking and rebuild relationships between banks and
The RC Archbishop of Westminster, the Most Revd Vincent Nichols,
said last week that "a market economy driven purely by the pursuit
of profit does not necessarily serve the common good, but may
actually harm it.
ECCR appointment. The Ecumenical Council for
Corporate Responsibility has appointed John Arnold, head of
partnerships at the Fairtrade Foundation, as its new executive
Mr Arnold, who takes up the post on 1 November, said: "Today,
people in the UK have increasing awareness of the influence that
consumer choice has through initiatives such as Fairtrade. We are
only just beginning to appreciate the influence that we can have as
investors, for example through our pension funds."
Question of the week: Are the banks any better now than
at the start of the latest crisis?