OK, Sir John
- but what about wisdom, courage and ethics?

Why does the Vickers report on banking side step the core questions of moral values and behaviours, asks ROGER STEARE. That’s a big mistake.

I wonder how many people have actually read the interim report of Sir John Vickers’ Independent Commission on Banking. If you do, you’ll discover that “bankers”, as a species, have almost become extinct. The report’s language barely uses the word “banker”. Instead, it refers to “bank” or “banks”.

Is this because bankers have become extinct? Are they in hiding? Or has the ICB fallen into the trap of seeing banks not as human communities, led or misled by bankers, but as legal life-forms with no moral conscience?

Read the report and you will see that all the recommendations concern questions of legal and financial form. The discussions and recommendations focus on balance-sheet ratios, liquidity, legal separation of retail and investment banking operations, branch numbers and so on.

These, of course, are important considerations, but the ICB follows the Walker and Turner reports in failing to tackle the fundamental issues of human character, moral values, ethical decision-making and the behaviours that follow. In fact, it avoids any usage of the words “wisdom”, “prudence”, “honesty”, “justice”, “fairness”, “empathy”, “courage”, “ethics” or “morality”.

In my view, and in the view fortunately of many senior bankers, this avoidance of moral values and behaviours is a big mistake. These challenges go to the heart of professional ethics and the standards for which this Chartered Institute stands.

In public, Stuart Gulliver, Group Chief Executive at HSBC, has stated quite clearly that he will be judged not only on the bank’s stock market values, but also on whether the bank is still regarded as a “moral and decent firm”. He told the FT in February that he has also committed the bank to a culture of “courageous integrity”. And these are not empty words, as I am working closely with the bank to make this happen.

In my dealings with other banks, I meet many good people who are also good bankers. But they are good bankers precisely because they are people first and bankers second. Banking is a service business. It therefore has meaning only when it serves our societies – when it serves us as fellow human beings. This is why retail banking, both for people and for businesses, must be the bedrock of banking. Investment banking, as Lord Turner has rightly asserted, is mostly “socially useless” unless it, in turn, serves the retail banking that serves our society.

So, are bankers really extinct? The answer of course is no, they’re not. But I firmly believe that bankers and the banking profession will become extinct unless inquiries such as the ICB begin to tackle fundamental questions of human values, judgements and behaviours.

Tinkering with balance sheets and capital ratios addresses not the causes of the banking crisis, but the symptoms. Banks aren’t people. They don’t think. They don’t make judgements. They don’t have feelings. They’re simply legal constructs.

We must stop this use of dehumanising language and begin to see that good bankers, professional bankers, are people first and bankers second.

Roger Steare is a Corporate Philosopher and Professor of Organisational Ethics at Cass Business School, London.

He can be contacted at: roger.steare@ethicability.org
You can try his integrity test at http://www.ethicability.org/

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