The collapse of bankers' self esteem

City of london

There is something a bit odd perhaps about the banks setting up a new body to ensure that their people are following high professional standards and treating customers properly.

On the one hand, it won't be the arbiter of whether individuals have breached banking standards - because the City watchdog, the Financial Conduct Authority (FCA), will soon announce how it intends to exercise those powers (having been urged by the Parliamentary Commission on Banking Standards to draft a new "single" set of banking standards to be followed by all).

But it will develop codes of conduct that are somehow aligned with, but presumably not duplicative of, the FCA's new standards. It will assess the training programmes of banks and third party providers for their appropriateness and fitness. And once a year it will present its findings to the boards of each bank on whether ethical behaviour is - or is not - at the heart of the respective banks' culture and practices

It is all about providing greater confidence to us that we are being treated decently by the banks.

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You would not expect Tesco, Sainsbury and Asda to set up an independent body to tell them how to provide confidence to their customers that they're not being ripped off”

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But in most industries, treating customers well is a competitive issue.

For example, you would not expect Tesco, Sainsbury and Asda to set up and fund an independent body to tell them how to provide confidence to their customers that they're not being ripped off.

So the appointment of Richard Lambert, the former FT editor and ex-director general of the CBI, to set up this new monitor of bankers' behaviour shows just how low bankers' self-esteem has sunk.

Apart from anything else, it is less than a couple of years since the UK's eight biggest banks set up the Professional Standards Board of the Chartered Banker Institute to "support the ethical awareness, customer focus and competence of those working in the banking industry" and "build, over time, greater public confidence and trust in individuals, institutions and the banking industry overall, and enhance pride in the banking profession".

Does the decision of the banks to finance the Lambert Plan show that the banks have written off that earlier initiative as a dead loss? That is unclear.

But they clearly don't believe it is sufficient to restore their public standing.

So what is the big conspicuous difference between that Professional Standards Board and the Lambert model?

Well the Professional Standards Board is governed, at the top level, exclusively by serving bankers. Whereas Lambert has insisted that no senior active bankers will be on his board - though three out of the 10 members would be recently retired bankers or independent non-executive directors of banks (the others would include a consumer voice, a trade unionist, an accountant, an investor, a small business person, an academic and even - oh dear - a hack).

Which probably tells you all you need to know.

However bankers do have to be wary of one thing.

Customer service and reputation for fair dealing is a competitive issue. And in an industry historically notorious for collusion, the bankers have to be careful that Lambert isn't seen as a veil for a collusive attempt to persuade all of us that the biggest banks are all much of muchness when it comes to conduct, thus deterring us from shopping around for the best and most sensitive customer service.

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

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  • rate this

    Comment number 13.

    More puff for the bubble.

  • rate this

    Comment number 12.

    Collapse of self esteem...or a bit of PR?

  • rate this

    Comment number 11.

    The banks aren't the problem. The greedy irresponsible untrustworthy bankers are the problem.

  • rate this

    Comment number 10.

    Banks are paying for this - unlikely anything will change. The gravy train continues smoothly ....... until the next crisis created by simple greed. Does anybody trust the banks?

  • rate this

    Comment number 9.

    What a joke!

    We need only recall how Angela Knight, then head of the British Banker's Association, was trotted out to smarmily gainsay any criticism of banks during the LIBOR crisis, to know what this spindoctors role will be.

    Indeed, this move proves the existence of a banking cartel in the UK. Otherwise, how will he know what to say?

    Break up the TBTF banks now!

  • rate this

    Comment number 8.

    Is it just me or does the Zombie Banking Sector suck the best Brains out of the University system ?
    How many great Engineers, Research Scientists, Doctors etc, have been misdirected into a life of Financial Fiddling instead of their true calling ?
    What a waste of Human Capital the City and Wall Street truly is.
    Come on lets have a sensible real economy based on balanced economics.

  • rate this

    Comment number 7.

    Just a whitewash scam to take the pressure off for serveral years.

    Need to get through the elephant hide before anyone could damage an investment bankers self-esteem!

  • rate this

    Comment number 6.

    Bankers and big business to oversee themselves? And we are supposed to welcome this? Nonsense.

  • rate this

    Comment number 5.

    I would prefer to see a representative of the ordinary customers in this role rather than one of the big beasts of industry and commerce.

  • rate this

    Comment number 4.

    2: I'm amazed these Banksters can even walk abroad by day.
    Seriously, all the people who have lost money (and even jobs/homes) to these Banksters actions, it truly is a miracle they aren't hounded out of the cities and towns by crowds of pitchfork and torch bearing peasants.
    The Banksters have created a Derivative FrankenBond Monster and at some point its going to bite them on the derriere....

  • rate this

    Comment number 3.

    Coolapse of self esteem perhaps, but as yet no one sign of contrition or an apology....

    ....even though the unholy mess THEY created is still reverberating round the blobe.....

    ....& still they earn millions just for turning up to work.....

    ....& off shore their "earnings" to avoid due tax even though WE bailed THEM out when THEY messed up.......

  • rate this

    Comment number 2.

    That's worrying, bankers suffering from low self esteem. Low self esteem can lead to behavioural problems. As can unduly high self esteem (which was the case before the crash).

    The answer is for bankers' self esteem to be properly in line with their talents and their value to society.

    So, low but not so low that they go creeping around in the shadows afraid to make eye contact with anyone.

  • rate this

    Comment number 1.

    Muggers get to have self esteem ?
    Come on, looting the system through Bonuses from State bailed out companies, they don't deserve to see a reflection in the mirror.
    Down with the Wall Street Vampire Squid !


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