The Sophomore Slump
If you read my last blog on Mark Carney’s first Reith lecture, you’ll know I pronounced it a Christmas “hit”. I’m afraid his second lecture this week (“From Credit Crisis to Resilience” -https://www.bbc.co.uk/programmes/m000q3sp) suffers from that well-known “difficult second record syndrome”, or as it’s known in North America – the “sophomore slump”.
There was very little in the first part of Carney’s second Reith Lecture I disagree with. Perhaps because his analysis of the Global Financial Crisis – a crisis rooted not so much in a loss of financial value, but the loss of ethical values – chimes completely with our own diagnosis, albeit more than a decade after the Chartered Banker Institute called for policymakers and regulators to focus on rebuilding banking’s human capital alongside financial capital. Sadly, at that time, the Bank of England (under previous incumbent, Mervyn King) and others responded with less than lukewarm encouragement to our calls for finance to learn and not repeat the lessons of history, the need for accountability, the need for finance to be rebuilt on solid, real-world ethical foundations; the need for finance to be supported by the central bank and regulators as a vocation and profession. So, it is good to see our views very much in the mainstream today.
Whilst we may now agree on the diagnosis, we differ in the course of treatment, however. I’m afraid I found it hard to be enthused by Carney’s defence of resolution regimes, the Senior Managers’ Regime and new market standards, plus some warm words about culture change. These were, and are, all positive steps. But they fail to raise professional standards in banking and finance, and they fail to enhance the sense of vocation needed if – to use Carney’s phrase, bankers are to see themselves “… as custodians of their institutions, improving them before passing them along to their successors.” The key principle of stewardship, in other words, which underpins the Chartered Banker Institute’s approach to the practice and profession of banking, and these days also encompasses the wider stewardship of people and planet. If policymakers truly believe the credit crisis was a crisis rooted in values, then they should come out strongly in support of professional bodies like the Chartered Banker Institute who have been tirelessly working to enhance and sustain ethical professionalism in banking. Warm words are not enough to sustain a vocation, our profession.
So, will Mark Carney’s Reith lectures be a one hit wonder? Or will he surprise us with an exciting change of direction third time around? Tune in next week to find out!
Simon Thompson, Chief Executive