IF the banking industry is unhappy with its new remuneration regime which could see bankers forced to forego their bonuses if they act irresponsibly, it only has itself to blame.
Despite the spirited defence of the Institute of Economic Affairs, which says the sector is already regulated to the hilt, this viewpoint is unlikely to be shared by those taxpayers and businesses who lost out because of the irresponsibility of the banks.
Hardly a week goes by without another embarrassing disclosure about another financial misdemeanour, the latest being the £218m fine which was levied this week on the Lloyds Banking Group after its traders manipulated interest rates. It was clearly the precursor to yesterday’s announcement by Bank of England governor Mark Carney whose condemnation of Lloyds was withering. “Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved,” he said.
This intervention goes to the heart of the challenge confronting the banks as they attempt to win back the trust of customers.
Even though countless people lost their houses – and jobs – through no fault of their own, the banking sector gives the impression of being in denial about the human misery that was caused by reckless bankers. There have been no prosecutions; just token gestures like the disgraced RBS boss Fred Goodwin foregoing his knighthood.
Their response to calls from the coalition for pay restraint has also reflected poorly on the banks. Instead of acknowledging the public’s anger, they have looked to circumvent the rules by returning to the bonus culture which proved to be so damaging prior to the recession. As such, the Bank of England had to act – but one final point can be made. These rules will not have to be enacted if bankers act responsibly.
When will it end?
More bloodshed in Middle East
EVEN by Gaza’s harrowing standards, reports yesterday of a deadly airstrike on a United Nations school housing refugees were particularly heartbreaking. Just how many more innocent lives need to be lost before the world leaders wake up to the awful scale of this humanitarian crisis and use their influence to broker some kind of ceasefire?
This, after all, was a building which was supposed to provide a safe haven for children and families needing sanctuary after Hamas rocket attacks against neighbouring Israel prompted an aerial bombardment that has grown in ferocity.
Tragically, the days now blur into one as people in the Middle East, and beyond, become immune to the almost routine nature of the daily news cycle – Hamas missile attacks, a defiant response by Israel in self-defence and even more bodies waiting to be buried. Just when will this misery end? As the Archbishop of Canterbury said, it is self-defeating for all sides to persist with the indiscriminate firing of rockets by Hamas at civilian areas or Israel’s aerial attack which fails to distinguish between combatants and non-combatants.
Yet, judging by the tame response of world leaders, there is little prospect of a resolution. Barack Obama is a lame-duck president; the European Union is pre-occupied by its own machinations and the Middle East is rudderless. With Tony Blair clearly regarded as a peripheral figure after seven years as a peace envoy, the United Nations and other bodies need to prove their effectiveness. If they don’t, the consequences for global security don’t even bear contemplation.
A weighty issue
The NHS must lead by example
THE head of the National Health Service makes a profound point that will provide much food for thought. How can the organisation persuade patients to lead healthier lifestyles when more than half of its workforce are classified as being obese or overweight?
The numbers are eye-opening. Of 1.3 million people employed by the NHS, around 700,000 staff need to lose weight according to reports and this is not being helped by hospital canteens continuing to set a rotten example by serving junk food rather than more nourishing meals.
As such, it is enlightening to learn of the attempts by chief executive Simon Stevens to put staff first. As well as healthier meals, he wants hospitals to provide more cycle facilities and to run competitions which encourage people to shed the pounds. With the financial cost of Britain’s obesity crisis likely to weigh in at £30bn by 2020, it is imperative that the NHS begins to lead by example.