Looking forward to speaking at Socially Useful Banking with Andy Haldane, the Executive Director at the Bank of England on Monday (October 29) to address where do we go in rebuilding the banking sector and the economy.
I’m there in my role as a director Bully-Banks campaign which represents small businesses mis-sold Interest Rate Swaps.
I’ll be highlighting three strands which I feel necessary to prevent any future bank-induced financial crisis as well as cases of bank mis-selling which at the last count, affected me and some 40,000 other small businesses.
Firstly, we need a mechanical solution, to clearly separate different roles of core banking services and speculative investment banking. Proposals for ‘ring-fencing’ the two functions within the existing banks is patent nonsense. There is a need for clear responsibilities, different managerial cultures and clear lines of accountability.
There is also the need to limit the size of the banks to avoid the ‘too-big-tofail’ syndrome.
Secondly, there is a need to establish clear principles or conducting business. Both the wider financial crisis and the specific cases of mis-selling of SWAPS to small businesses, were created by the banks losing their moral compass, and failing to do the right thing.
Here rather than creating a set of important, worthy but ultimately abstract principles I would recommend adopting a very simple creativity technique: using a role model.
Whenever I have a tough decision I call upon a role model to run the question past. In most cases I use the fictional character of the Captain played by Tom Hanks in the film ‘Saving Private Ryan’.
Any complex issue or tough decision I invoke the role model and say: ‘What would the Captain in Saving Private Ryan do here?’
It provides a valuable tool to give instant clarity and insight.
For the banking sector I would suggest the ‘Tom Hanks Rule’: whatever the tough decision you ask: “What would Tom Hanks do?”
The third dimension is for consumers to grow up and take responsibility.
When I was a young public relations executive I had to write a case study of a printing firm which involved interviewing a printer of many years experience.
The interview got off to a bad start: “Before we start” he said “I want you to know that I hate people advertising and PR agencies.”
“Why was that?” I protested. He responded by providing me with some valuable instruction: “Any print job involves three elements – cost, speed and quality. And the problem is that at best you can only ever get two out of three. But agencies want all three.”
He was right.
I’m now a supporter of what I call ‘The-world-as-I-like-it-Tax’. We all need to face that any decision has to be made on a judgment, where there has to be allowance made for varying factors. You can’t expect to pay low cost and have no consequences.
If the banks had been transparent in selling their SWAP products I wouldn’t have had a complaint, if armed with the facts, I made a judgment and a decision
Something needs to be done to address the actions and on-going behaviours of banking.
We could engage in banker-bashing.
We could take earnest yet unarticulated action like the Occupy movement.
Or we can take tangible steps to create socially useful banking at the heart of economic recovery.
I’m sure Tom Hanks would adopt the latter.
More information about Socially Useful Banking organised by Occupy Economics at 6pm on Monday October 29 at the Friends House, 173, Euston Road, London NW1 2BJ at www.sociallyusefulbanking.com