One can imagine the snorts of derision with which King’s remarks would be greeted in the canteen of any major bank, but it is a message that really needs to be listened to.
Mervyn King started speculating about the legacy of the Olympics even before they were over, with an article in the Mail on Sunday about the lessons the UK’s financial sector can learn from the games. One of his points was how our banks should look to the games and their competitors for inspiration — inspiration to reform their dissolute ways, and to help repair the economy.
King (pictured below left) urged the UK’s beleaguered banking sector to ‘look at the success of the volunteers whose presence at the Olympic Park and around London did so much to create the atmosphere of happiness that pervaded the Games, and who represented all of us so well when greeting and helping the many visitors from overseas.’
King is right to flag up the huge contribution these thousands of unpaid volunteers made to the Games, but what can the banking sector learn from them? ‘That motivation does not come from financial incentives alone,’ he wrote.
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One can imagine the snorts of derision with which that remark would be greeted in the canteen or lift of any major bank, but it is a message that really needs to be listened to. Over the last ten days Standard Chartered have been dragged through the mud and, despite earnest protestations of their innocence last week, they have agreed to a $340 million settlement over allegations of suspect transactions with Iran. It is yet another reminder —not that we needed one — of how the short term greed of our major banks has completely obscured the fact that the UK financial services sector has world class products to offer.
Concentrating first and foremost on the quality of their products, says King, would bring the banks‚ profits rolling in anyway, but ‘there is no substitute for passion and commitment to one’s sport or business.’ At a time when the City has been primarily concerned with chasing profits and apparently not too fussed about how and where they’re generated, this call for a change of focus is more relevant than ever.
There are encouraging signs that this change is happening. Sir David Walker, new Chairman of Barclays, has vowed to reform pay structures so that failure is not rewarded, and to speed up the ring-fencing of the bank’s retail and investment arms. And hopefully Standard Chartered can quickly move on from its implicit admission of wrongdoing and restore its trashed reputation. King, usually the harbinger of gloomy economic predictions, has chosen to be positive at just the right time, and the UK’s financial sector should sit up and listen.
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