ethics free banking

June 28, 2012 · Posted in Blog 

Today we hear that a number of leading banks, notably Barclay’s bank, have been lying to the markets about their inter-bank lending rate, a key rate to give a false impression of the strength of the bank. This has gone on throughout the financial crisis. This manipulation was done to make money for the bankers at the expense of the businesses and individuals who took loans. It was a greed driven activity.

It would appear that banking is ethics free. No resignations today, no sign that this is deemed illegal. No comment from the head of Barclay’s. It is hard to imagine such malpractice being allowed to go unpunished in the public sector and hard to imagine that a teacher or a headteacher being allowed to keep their job after systematically lying, fixing their pupils or school grades for instance. At a university if a student lies about their work, for instance claiming something about their work which is not true, they can be censured or even thrown out. A lecturer who manipulates student grades to help with a promotion can be disciplined, perhaps sacked. Today we hear of fines but who has taken responsibility for this? No one so far.

The professional expectations found in public sector professions seem to be absent from the financial sector, and yet it is education and health among other public sector bodies that are bearing the brunt of government cutbacks because of the bailout of the banks. It seems there is one rule for the public sector and another for the world of banking. It would appear that the world of banking is free from being encumbered by ethics. Is there any sign that the Government intends to change this? What major reforms have been put in place to bring about a more ethical and responsible financial sector? I can think of none. There seems to be a great deal of change in the public sector instead. What major reforms have been announced? Hardly any.

There is an ethical crisis at the heart of our most important industry. For a long time the mantra that what ever makes a profit is acceptable has dominated the industry. ‘Greed is good’ as Michael Douglas said when playing the corrupt trader in the 1980s film Wall Street. Greed has been encouraged and rewarded and it has led to the crisis of our generation.

At present, there seems to be little alternative to this mantra and that explains the silence about how to change the financial sector. It is as if we have run out of ideas. Perhaps we need a new big idea.


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