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Whittam Smith ‘shocked’ by banking scandal

07 July 2012

THE First Church Estates Commissioner, Andreas Whittam Smith, told General Synod on Saturday that the banking scandal would not be solved by regulation.

Mr Whittam Smith said that the revelation that Barclays bank manipulated interest rates had been a "shock". Other major banks had been "doing the same thing, but we don't know the details yet".

At close of business on Friday, the Commissioners held approximately £5.6 million of shares in Barclays, and the Pensions Board approximately £5.1 million.

Mr Whittam Smith said: "It's not bad banking we're dealing with. . . it's bad business we're dealing with. I think it's worse than I've seen in my career. . . I haven't seen it like this before. I think this poses questions for us and for ethical investment, and we're certainly rapidly going to do some work on banks."

Mr Whittam Smith said that he did not think that "regulation will make much difference", because the banking industry had been "regulated for two centuries". "We're dealing with cultural deficiencies. If there's anybody who should think about these sorts of deficiencies, it's the Church."

Mr Whittam Smith said that the head of Barclays' Remuneration Committee came to see the Commissioners last year, to explain "the criteria they use on deciding on their enormously high rewards".

Mr Whittam Smith said that church investors had power to influence company boards, though their influence "will only go so far. It won't turn the wicked into the virtuous, but it will edge up certain boards into better behaviour than would otherwise have been the case."

In April, Mr Whittam Smith signed a letter from a group of investors to The Daily Telegraph, which said: "The problem of excessive executive pay has become so serious that we have resolved to work with our investment managers to ensure that the remuneration policies of the companies we invest in are aligned with our interests, transparent, linked to performance, and appropriate in the context of each company"

( News, 25 April).

Leader comment

Paul Vallely

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