So this week the new Governor of the Bank of England, Mark Carney starts; I wonder what he really thinks of the world economy and more especially the UK economy and if he’s had second thoughts over the last couple of weeks?
Earlier today I noted on the BBC news website that one of his jobs was to review the representation of females on UK bank notes: whilst I think that there should be a fair representation of women who have made a difference on bank notes surely there are some more essential matters that he should be considering in his initial days at least?
On Monday there was an open letter to Carey, in the iNewspaper, from Chris Blackhurst former editor of The Independent which noted the outgoing Governor Mervyn King’s shoes were not easy to fill but mostly asked for whatever he did not to be done from the top of an ivory tower. And probably that’s the perception and experience we have had of the Bank of England.
When writing about the authenticity in business evolution and previously the posturing of banks and their leaders and doing some research into those articles I started to consider what a bank which was authentic in the way that it did business would look like. And I remembered that the Quakers had not only founded industries and businesses which were authentic .e.g. Cadbury’s Fry’s, Quaker Oats but had also founded two of the UK’s leading banks Barclays and Lloyds, now Lloyds TSB. This I found rather bemusing given the goings on in these banks and wondered what had happened along the way for there to be such a sea change in the way these two banks operate? More on that another time.
And then I read that Church of England is backing a bid, by a consortium, seeking to set up an ethical bank, for 316 Royal Bank of Scotland branches. The bidding group is made up of Corsair Capital a private equity firm, Centerbridge an American investment firm, RIT Capital and Standard Life.
We have already heard the Justin Welby, the Archbishop of Canterbury’s thoughts on the role that RBS plays in society but how many of use knew the CoE also holds a small stake in Barclays bank whose CEO has openly shared his desire and vision to turn the bank into a values-based organisation. Although there is some conjecture this vision is a knee jerk reaction to his appointment following the Libor scandal.
On further research I found an eBook The Guide to Sustainable Banking, which had some interesting points to make including that British banks had spent more than £100m on lobbying against the reforms of the City of London and that the banks continue to have a huge influence over government with almost bottomless pockets to pay for lobbying.
It also went on to say that never before in history has the UK public been so disengaged and disenchanted with the main banks and were voting in droves with their accounts to move to what are seen as more ethical banks and investment vehicles. There are a number of options and more and more becoming available.
Many people have been moving to the Co-Operative Bank which had originally been going to take over a number of LloydsTSB branches this year but is now experiencing financial troubles of its own. So does the fact that it too is experiencing these troubles indicate that no one is immune? Or prove that ethical banks don’t work? Or is there some truth in the rumours that it suits government and the banking world for an ethical bank to fail?
A poll last year asked whether people thought that bankers would lose their jobs if they lied or cheated and 67%, that’s two thirds of the people asked, said no. Which shows there is a significant lack of faith in the industry.
The Triodos Bank founded in 1980 and established in the UK in the 1990s was set up with anthroposophical foundations – a philosophy created by the well-known Austrian thinker Rudolf Steiner and derives its name from the Greek word for a threefold approach.
“It very much encompasses
that awareness of society, the environment and finance, and we keep all three very firmly aligned in all business positions”, explains Charles Middleton, the bank’s managing director.
Islamic banks based on Islamic Sharia law will not invest in certain business sectors including the financial sector and are operating on a strict code of ethics and in doing so being authentic.
And so with these new banking and investment institutions being established and people moving their personal bank accounts and investments to ethical providers what happens next? The Co-Operative has long been the bank that many SMEs use because of its fairness in the way that it treats businesses especially with bank charges. So will larger businesses vote with their accounts or are they too reliant on the loans and overdrafts these banks give them?
Will the banks continue to have sway with the government and benefit from the cash that it can afford to spend on lobbying? (can this be in large type as a call out please)
Will pension funds be forced by their members to reconsider investing with these financial institutions and move to more ethical investments and financial institutions? Are people becoming more savvy as to where there money is invested? Because it’s not just the bank they are investing per se but the businesses, which that bank is in turn investing in.
The evolution in authentic business has truly started, undercover in some ways since there is little really being spoken of the change in people’s banking preferences but more overt in others. What’s clear is that there is a want as well as a need for change because we can’t do business the way we’ve been doing business as its no longer working.
‘Do all the good you can, by all the means you can, in all the ways you can, in all the places you can, at all the times you can, to all the people you can, a long as you ever can’ John Wesley. And that seems to me to be a pretty good ethos for authenticity in business.
I wonder what changes the next 12 – 18 months will bring for the banking industry and what influence the Governor might have in those changes?