WHEN the Archbishop of Canterbury took to the stage on Wednesday
evening to debate "What makes a good bank?" news had just hit the
City that the banker he once took to task over his response to a
similar question, had stepped down.
Stephen Hester, the banker, announced that he would leave his
post as chief executive of Royal Bank of Scotland in order to
comply with the Government's insistence that the bank return to
private ownership by the end of 2014. As a member of the
Parliamentary Commission on Banking Standards, the Archbishop once
accused him of giving "motherhood and apple pie" responses to his
questions about RBS' obligations to society (News,
On Wednesday night, the Archbishop declined to say where RBS
might find a "good man" to replace Mr Hester. But he said that
"banks, to be good, need the fear of hell and the hope of heaven,
not merely the fear of penury and the hope of a larger bank
Speaking at the debate at St Paul's Cathedral, organised by the
St Paul's Institute, the Archbishop suggested that "the biggest
weakness of all in the analysis of the failure of banks to be good
banks has been around understanding about human beings. We have
looked at banks as though sin did not exist and redemption and
salvation were not possible."
He said: "At the heart of good banks are good people. And if we
want to have good banks, we have to believe in fallible people. . .
If we believe in fallible people, we will work on aspects of
behaviour and training that is conditioning the body, that
recognise that human beings are both more fallible than a systemic
regulatory system will allow, and have greater potential than our
pessimism might permit."
He called on the City to undertake a "deliberate, self-designed
popping of the bubble of inward-looking self-regard". For him and
his wife, both London-born, it had been a "great shock" to return
to London, a "buzzing" place whose wealth was not replicated in
most of the UK and which was in danger of developing "a culture of
"In a dystopian mood, it would be possible to imagine a future
in which . . . the needs of the utterly cosmopolitan population are
served by the disenfranchised residents of the surrounding
countryside, what in Sparta were called the serfs," he
An alternative was the "possibilty of wealth as life-giving
water, spreading through all the channels of our national and
global economy from the great well of talent and prosperity that is
London". Differences in wealth and potential could be eliminated,
he said, but not without good banks.
The debate was also addressed by Antony Jenkins, the group chief
executive of Barclays, who, like Mr Hester, had been interrogated
by Archbishop Welby in Westminster. He admitted that "being told
off" by the Primate was "not a comfortable experience".
He began with a defence of capitalism. It had "lifted millions
out of poverty", he said, and it was unlikely that the debate's
venue could have been built without debt.
Nevertheless, he agreed with the verdict of the Church
Commissioners that Barclays had "repeatedly let down society with
its conduct" (
News, 17 May). Banks had become "too focused on the short term"
and "forgot what our role in society was and who we were there to
He argued that there was "no contradiction between doing well
and behaving well", but accepted that many would be "sceptical"
about his comments: "Capitalism and banking with a moral compass is
our mission at Barclays, and we are happy to be judged by how we
Another panel member, Laura Willoughby, chief executive of Move
Your Money, described the relationship between individuals and
their bank as a "hostage situation", and urged the audience to take
responsibilty by moving their money: "The more the banks rely on
our inaction, the more we can be certain that they won't take
The Archbishops revealed at the start of the debate that the
final report of the Parliamentary Commision on Banking Standards
had been completed just twenty minutes earlier. The Commission was
still in purdah and the audience would find no "hidden clues" about
it conclusions in his comments.
Listen to Archbishop Welby's talk here.