Changing Banking for Good: What is the Cure for Misconduct?
12 Pages Posted: 5 May 2015 Last revised: 14 May 2015
Date Written: May 4, 2015
Abstract
The world of banking is awash with scandals of every conceivable variety. Benchmark manipulation, PPI mis-selling, cheating on taxes and foreign exchange manipulation are just some examples of bank misconduct. Common people are so far removed from elite decision-making that they have no role to play in the processes of change. This article argues that the league table for banks developed by the Conduct Costs Project provides a much-needed voice to the disempowered majority, i.e. common people who are routinely called upon to save predatory global banks in times of economic necessity. Most of all, the league table provides depositors the option of boycotting serially offending banks such as HSBC and Barclays. The Fair and Effective Markets Review – a tripartite mission involving the FCA, HM Treasury and the Bank of England that seeks to restore trust in the markets – has taken the view that the approach pioneered by Roger McCormick (Managing Director of the Conduct Costs Project Research Foundation (CCPRF)) could provide a framework for further development in relation to industry-wide performance measures relating to conduct. In his November 2014 speech entitled "The Future of Financial Reform" the Governor of the Bank of England, Mr Mark Carney also used the research of the Conduct Costs Project as a barometer to gauge the penalties imposed on a sample of ten banks by authorities in the United States, the United Kingdom and the wider European Union. In reality, a league table for banks is the same thing as having a corruption index for the world such as the one maintained by Transparency International; which whilst not perfect nonetheless adds to the learning on the level of corruption and helps us choose our options.
Keywords: Banks, Bank of England, Barclays, CFTC, Conduct Costs, CCPRF, FCA, FINMA, Financial Services Act 2012, HSBC, PCBS, Wheatley Review
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