Since the collapse of Lehman Brothers and the following global banking crisis and recession, the big banks have hardly been out of the news.
As the tide drifts out, more and more people are seeing the detritus that came in on the previous decade’s wave of debt and easy credit. What is surprising, however, is that the mantra of ‘too big to fail’ has come to mean absolutely nothing in regulatory terms.
Policy has been focused on the big central banks pouring money into the retail banks and big financial institutions with the expectation that increased liquidity would mean better funding for small businesses. Instead, most of the banks used the cash to fix their debt-ridden balance sheets while ignoring the needs of those businesses.
A lot of the problems at some leading banks can be said to be historic, and can therefore be blamed on previous regimes, but to the average man and woman in the street, a lot of it is a continuing corporate culture, capped with arrogance and obstinacy.
There is no objective evidence that these banks are moving in the direction or speed that most of us would like to see. Yet, so far, the deafening silence from the regulator is embarrassing.
The most widespread excuse, and the one they believe has some kind of logical weight, is that if we in Britain do not compete on salaries and bonuses for the best and the brightest executives then they will up sticks and move to Frankfurt, Singapore, Hong Kong or somewhere else.
The simple answer is not to compromise on our public or corporate ethics. If these flawed individuals, who appear not to understand ethical behaviour, still want to move to an environment in which anything goes, then good riddance.
The truth is that there is no shortage of good talent, and no sooner have these people packed their bags than younger, brighter, more ethical men and women would be glad to step into their shoes.
To be fair to those bankers, corporate greed and bad behaviour is not restricted to them; it can also be found in the privatised utilities, public transport, local authorities, supermarkets and politicians. In almost every important institution with which ordinary people have to interact on a regular, if not daily, basis there are always legitimate grounds for complaint.
Equally, something is wrong when building societies are fined by the regulator for treating their members badly – just take a few seconds to think about that – and even the Co-op Bank found itself with a drug-abusing chairman in a dog collar, no less.
All this has fed the myth that ordinary businesses, in particular banks, cannot be profitable if they behave ethically towards their customers.In truth, corporate behaviour is framed in the boardroom and interpreted on the executive floor. It does not just emerge at the customer-facing end.