“Bankers keep cheating, but where are the protests?”, (leader). The Occupy movement was one, though smartly driven from the temple-yard of the Stock Exchange on to the cobbles outside St Paul’s.
The occupiers were right and the problem is not limited to banks. Will Hutton half-acknowledges this when he says: “The [banking] industry structure should never have been allowed” and adds: “Companies (in general) are seen by too many people, notably shareholders, as just instruments for self-enrichment.” (“Banking is changing, slowly, but its culture is still corrupt”, Comment.
“Just”? The confusion is at the heart of company law. The banking industry is no more or less committed to customers and community than the food industry is to consumer health or the fossil-fuel extractors to green hills and valleys. Bankers and CEOs are not uniquely greedy, but their job description puts company success and shareholder profit before any other social or environmental interest. The directors’ prime duty under the Companies Act of 2006 is to the success of their company “in a way that benefits the shareholders”.
They must merely “have regard” for other factors – employment, customers and suppliers, community, environment and long-term consequences. Where the choice is between clear-cut profit margins and such a range of ill-defined variables, it’s obvious which side the bosses’ bread is buttered on. Until these social and environmental “regards” are hardened up as duties, clearly defined and structured into company law and practice, no amount of top-down tinkering will redress the legacy of inbuilt injustice or clean up a “corrupt” culture that is just being true to itself.
Greg Wilkinson
Swansea
Your leader asks why there are no pickets outside the banks, no protests from “ordinary citizens under the economic cosh”. I think I know why: those ordinary citizens have been sold the lie that their economic woes are due to the profligacy of the last government, nothing to do with bankers. Over the page, Will Hutton reminds us how laissez-faire bank regulation facilitates the cheating. If the last government attracts any blame, it is for under-regulation rather than overspending. Is that too nuanced for today’s political debate?
John Filby
Ashover
Derbyshire
There always has been and always will be fraud in financial services but there are ways of making it less attractive to the fraudsters. Really swingeing fines on the banks, fines of, say, 10 times what they have gained would concentrate directors’ and shareholders’ minds. The perpetrators of the frauds ought to face long prison sentences, sequestration of their assets and a lifelong ban on working in financial services. As a last resort, the bankers ought to face having their businesses taken over by the government. That ought to concentrate minds.
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Not much point in transferring your money from a bank to a credit union – the credit unions all have accounts with the banks. They are not, at present, big enough to be their own banks.And nowadays it is almost impossible for someone to operate without a bank account. Wages, pensions, benefits are all paid into bank accounts. The days of the pension book you took to the post office, or the little brown envelope you got each payday, are gone. The banks have us by the short and curlies and they know it.
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