Sometime in the early part of the last decade the Chartered Institute of Bankers actually introduced the subject of Ethics in its Academic Teaching Programmes. Really this was introduced as it became clear that standards were starting to slip and the traditional proposition that banks in the UK offered their customers was being diluted. It was really too late to prevent the complete debacle that lead to the global financial crisis and while some of the causes of that were related to sheer incompetence and greed, the standards of ethical behaviour on the part of many of the principals was appalling.
It doesn’t seem that much progress has been made as one learns more and more about the behaviour of RBS/Natwest and BOS/Lloyds where it is becoming clear that staff not only lied to customers and managements, but actively colluded to “doctor documents”, transfer signatures and indulge in significant levels of forgery. The NCA (National Crime Agency) has numerous cases in front of it, which really need to be looked into. Endemic fraud in a heavily regulated industry may seem odd, particularly where there is no obvious financial benefit to employees who do these things; however, it has happened before in the previous decade where banks in the US were fined billions of dollars after the use of forged signatures and fraudulent documentation to evict customers from their homes etc.
The latest news on these issues is that a Parliamentary Select Committee has written to the City Regulator and fraud investigators to demand an update on their investigation. There is a belief that this was conducted on an “industrial scale” and indeed had resulted in some customers having their homes repossessed! One of our leading newspapers has, in fact, sighted multiple bank documents, which purport to be signed by the same person, but where the signatures bear no resemblance to each other! Altogether pretty appalling!
Additionally we are now reading again of spying of more employees at Credit Suisse, where the chief executive resigned last year over the first scandal. It now appears that there is a further situation in spite of the bank’s insistence that the first event was an isolated one.
It does seem that large banks are struggling greatly to restore their reputation following the massive losses and the PPI scandals of the last decade. It really is unclear as to whether the leaderships and boards in the big banks in the UK and Europe are up to the task and able to restore public confidence.
On another topic, it has also been interesting in very recent days to note that Lloyds Banking Group actually had to reach out to HSBC to get a successor for the Portuguese Osario, who is planning to retire. I must say that from a governance point of view this is an appalling inditement of the succession planning in that banking group. Osario had been there for many years and why on earth the Board of Directors failed to identify potential successors during that lengthy period is anybody’s guess! In my own personal opinion, the succession planning is an absolute critical element of a board’s activities.
- Glasgow-based John Robertson Wright is an academic, veteran banker and a former CEO of Oman International Bank and Gulf Bank, Kuwait.
The latest news on these issues is that a Parliamentary Select Committee has written to the City Regulator and fraud investigators to demand an update on their investigation. There is a belief that this was conducted on an “industrial scale” and indeed had resulted in some customers having their homes repossessed! One of our leading newspapers has, in fact, sighted multiple bank documents, which purport to be signed by the same person, but where the signatures bear no resemblance to each other! Altogether pretty appalling!
Additionally we are now reading again of spying of more employees at Credit Suisse, where the chief executive resigned last year over the first scandal. It now appears that there is a further situation in spite of the bank’s insistence that the first event was an isolated one.
It does seem that large banks are struggling greatly to restore their reputation following the massive losses and the PPI scandals of the last decade. It really is unclear as to whether the leaderships and boards in the big banks in the UK and Europe are up to the task and able to restore public confidence.
On another topic, it has also been interesting in very recent days to note that Lloyds Banking Group actually had to reach out to HSBC to get a successor for the Portuguese Osario, who is planning to retire. I must say that from a governance point of view this is an appalling inditement of the succession planning in that banking group. Osario had been there for many years and why on earth the Board of Directors failed to identify potential successors during that lengthy period is anybody’s guess! In my own personal opinion, the succession planning is an absolute critical element of a board’s activities.
- Glasgow-based John Robertson Wright is an academic, veteran banker and a former CEO of Oman International Bank and Gulf Bank, Kuwait.