Sants wishes bankers had been more honest

 

Hector Sants, who recently quit as the UK's top financial regulator, said on Wednesday that he wished "bankers had been more honest".

Speaking at the Said Business School, Mr Sants - who was chief executive of the Financial Services Authority from July 2007 to July 2012, and was an investment banker for most of his career - said that he did not mean that most of them had deliberately lied to him and his colleagues.

But he said that many of them were routinely "self-delusional" about the risks they were running.

Sants was participating in a debate on trust in financial markets (in which I was also a panellist).

Among the reforms he wanted to see to restore trust was the abolition of what he called "revenue-related incentives", or pay for bankers that is directly linked to the revenues they generate - to eliminate temptations for them to engage in bonus-generating deals that could turn out to be toxic.

The new chief executive of Barclays, Antony Jenkins, recently announced that branch staff would no longer have their bonuses dependent on the volume of financial products they sell. But many bankers continue to be rewarded for sales rather than the quality of the relationship with customers.

Mr Sants also advocated a new code of practice for the industry.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
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    Comment number 222.

    The solutions found to economic problems resolve around income and leveraging it into more income. Income was believed to be a finite resource but we may be changing that - which is entirely brilliant, possibly. Income is the problem and it is diversified and expanded to become a bigger problem, and so forth. It is no longer necessary to understand more than this.

  • rate this
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    Comment number 221.

    Bankers are human ( sorry but it's true ), if you are not only encouraged, but highly rewarded to sell anything to anyone, you will. Political entities encouraged the feeding of the boom years, cash ( debt ) on demand. Bankers took the blame, politico's now want banks to lend again, not surprisingly they aren't too keen. If you want bankers standing trial, what about some politicians as well.

  • rate this
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    Comment number 220.

    216 HfH
    I'm not sure which link of mine you read re Gesell, but a fixed money supply is not what is being suggested.Helmut Creutz in his modern take on the problem calls for a'circulating safeguarding' through a 'user fee' for money. Central banks will be better able to synchronise the amount of money with demand through steady circulation.
    The withholding without penalty only distorts interest.

  • rate this
    0

    Comment number 219.

    At last, perhaps you lot have realised that ET returns this summer.

  • rate this
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    Comment number 218.

    purple @215

    The tractors built a 100 years ago have rusted and are no longer in use (capital depreciation). However, the people that made those tractors learned how to make better tractors, better engines, better electrical circuits and better materials. Some of that knowledge is still in use. Individuals learn things by searching and this knowledge accumulates as a form of real capital.

 

Comments 5 of 222

 

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