Another hornets’ nest
The more we hear about the Libor scandal the more it looks like a hornets’ nest: known and unknown banks knee-high in corrupt practices, regulators having been told but preferring to turn a blind eye to the most malodorous, arrogant and unethical behaviour imaginable in any business culture.
What makes it worse, is that most of this started in the boom years preceding the banking crisis, went on through the crisis, continued even when the banks’ debt was transferred to taxpayers, and even so there is a growing belief that this was still being practised until recently.
That we have chosen, so far, not to call in criminal investigators, with their proven skills for forensically examining bad practice, is nothing to be proud of.
That some of the biggest individual names in financial regulations have been mentioned as having known, or were notified, of the corrupt practice, makes it even more worrying.
Like the unrepentant burglar, some Barclays’ officials are allegedly putting it about that if people think they were behaving badly, we should all wait until the known and unknown banks involvement are revealed.
So, British banking ethics have come down to a comparable analysis: who is bad, really bad and unforgivable.
By any measure, this is a deplorable state. At the very best it undermines consumer confidence in our banking system, over and above the concerns people already had, and at worst, it makes it seem as if we just cannot trust anyone in authority – politics, state enterprise or private industry.
From rigging the benchmark that determines the lending rates for mortgages, credit cards and bank loans, to that of petrol prices at the pump.
What next? Are they going to kidnap babies for money?
Doing the job properly
Now that major banks are running in to serious trouble with their technology following the decision to outsource, and with clients of other firms losing money to organised gangsters in these countries, now is as good a time as any for the City regulator to re-consider if outsourcing is in the best interest of savers and investors.
We have always said here at FA that, over and above the security risks, jobs should be kept at home.
It is more reassuring to hear a voice from the far corners of the Kingdom than someone speaking to us from South America, Asia or Africa. Further, we must ask what is the real cost of outsourcing? Maybe some firms only see the bottom line and totally ignore customer protection, including passing all one’s personal data on to people from the back of beyond.
While we are shaking up the banks and other financial institutions, let us do a proper job, root and branch.
More from Hal Austin
- Aegon pays over 90% of life, CI and PI claims
- Labour pledges to monitor, not unwind, pension reforms
- Openwork launches Newton-managed multi-asset income fund
- Adviser investment models evolve - but fund picking not dead
Opinion on Regulation
- Fos is the elephant in the pension freedom room
- Human rights legal claim against FCA is risible
- Disclosure? Chance would be a fine thing