Banks have much to do to regain out trust
The British public appreciate that it was necessary to bail out large portions of the UK banking industry. To not have done so, would have left us without a banking system – implying the inability to make or receive payments, savings deposits being lost, a collapsed stock market and a totally inactive economy. A hunter gatherer economy?
But having bailed out the banks and saved the country’s financial skin, we the tax payers, expect the banks to mend their ways. They cannot go back to the ways they operated prior to the big shake up. The banks must be straight about their mistakes and convince the country that they will never return to their previous excessive risk taking and excessive bonus culture (an issue I feel passionately about and have already blogged about on this web site). Those bankers who believe they can keep their heads down for a few months and then it will all be hunky dory – back to the gravy train – must think again! In fact any who are even tempted to think that way should be dismissed without adieu. The banks, and us the bank rolling taxpayers, will be much better without them.
The restoration of the public’s trust in the banks must start with a commitment that past mistakes will never be repeated and this implies a willingness to learn from the mistakes.
This also means that the culture of secrecy built into banking business has in part to change. I am not advocating that banks divulge the activities of its clients (unless required to do so for legal reasons), but regulators working on our behalf, must be much more hands on. For that to work, they have to get inside the banks operation and fully understand what is going on and how the banks are controlling themselves - and the risks they take.
The only problem then, is do the regulators have the necessary skill set to undertake that level of regulation? I suspect not as things sit now, but that will have to be corrected. I only hope they can.
