We need a fair banking movement

In an extract from his CAFOD Pope Paul VI Memorial Lecture on 18 November, Fr Christopher Jamison calls for a fair banking movement:

Since the beginning of the banking crisis in 2007, understandable public outrage has generated a great deal more heat than light.

The ‘Occupy London’ camp on the steps of St Paul’s Cathedral is like a modern art installation; it perplexes, inspires and annoys in equal measure. It symbolizes an alternative vision of the world, trying to say something important but struggling to say it coherently.

There remains a vacuum of informed public debate in Britain, and even the official reactions to the crisis have left the moral and human dimension to the crisis ignored.

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Sir David Walker’s 2009 Review of Corporate Governance stated that ‘the principal deficiencies in bank boards related much more to patterns of behavior than to organization.’ Yet in spite of Sir David’s insistence that people not systems were to blame, the body of his report never uses the word ‘ethical’ and only uses the word ‘moral’ in the technical context of ‘moral hazard.’

Sir John Vickers’ report makes major recommendations about restructuring banks to make them more stable and to ensure that the taxpayer no longer has to bail out investment banks. But again, his report is concerned only with systems not morals.

In his most recent encyclical, Pope Benedict sums up the alternative approach: ‘Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers.’

If loss of purpose lay beneath the disorderly behavior of the young seen on the streets of London last summer, then loss of purpose also lies beneath the disorderly behavior of the bankers who work in the offices that rise above those streets. We need to enable both disadvantaged youth and manic bankers to rediscover their purpose in life.

That sense of purpose comes from the essential services that banking provides to the world outside the financial industry. When the purpose of banking becomes the generation of financial products to pass within the financial system and increase remuneration, then its social purpose becomes obscured.

Worryingly, a recent St Paul’s Institute survey recorded over 75% of City workers saying their primary motivation was the high levels of remuneration. If their driving purpose remains the size of their bonus, then the system is still failing.

At present, most financial services employees in Britain believe that acting morally means simply acting in compliance with regulation. The old Financial Services Skills Council showed this equivalence in its qualifications framework where learning the rules was called ‘Ethics’.

Rules are needed but they should be minimal requirements not indicators of moral integrity. What bankers need is an ethic to help them identify moral problems that go beyond compliance and training in how to handle them.

Starting with a clear statement of their purposes, banks should devise an ethical ‘Good Financial Practice Code’ to support them. Before they are able to fully practice, bankers should receive compulsory formal training in the ethical behaviour expected of their profession, especially on how to resolve conflicts of interest.

This Code should be devised and enforced by a new professional standards body along the lines of the General Medical Council.

Last month, the Vatican’s Pontifical Council for Justice and Peace also published a statement on the global economy, proposing a global authority to ensure that markets behave morally, and the Archbishop of Canterbury followed swiftly to support many of their proposals.

We have here the beginnings of a fair banking movement, and there is a parallel here with the Fair Trade Movement.

This began when experts got inside the world of international commodity trading, a highly complex global market. With great tenacity and having first been labeled freaks, they offered an alternative supply chain model within the market. They challenged the big players and forced them to offer fairly traded products in all major supermarkets.

The public is now aware of issues around international trade that were once closed to them and consumers have led a major market adjustment.

The long overdue moral debate about financial services has begun but it is by no means over, and we are waiting to hear the voice of the bankers themselves.

That is why the initiative of the Chartered Institute of Bankers in Scotland to create a code of professional conduct is a welcome first step.

We need a William Wilberforce of banking, someone from within their ranks who will bring amazing grace to bear on this vital aspect of our lives and enable bankers to discover in what ways their work is a vocation.

As with Wilberforce and the abolition of slavery, we will be told that a Fair Banking Movement will weaken the British economy. But in the long run, the abolition of immorality never weakens an economy; it strengthens it.

Tickets are now available to purchase for the 24th Pope Paul VI Memorial Lecture, featuring Fr Christopher Jamison. Call 020 7095 5684 to book using your credit/debit card

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