Great and good? Not any more...
WHO would be a bank boss? At one time, leading a high street bank would automatically command respect and guarantee a place in the ranks of the great and the good. Now every last one of the leaders of the Big Four is under fire.
Stuart Gulliver, who is stepping down in February as chief executive of HSBC, leaves behind him a string of multi-billion pound settlements for wrongdoing including a huge penalty in the US for moneylaundering for drug barons.
Even as he prepares to clear out his plush office, the bank is facing yet another possible investigation into alleged illicit money transfers for the controversial South African business dynasty, the Guptas.
At least Gulliver has managed to hang on to his job for a respectable length of time, having been in the hot seat since 2011. At Barclays, the chief executive’s throne has resembled the Red Chair on the Graham Norton TV chat show: the bank has had no fewer than five bosses since 2010.
It is entirely feasible that it will soon be six. City regulators are expected to rule shortly on the conduct of the incumbent, Jes Staley, who tried to unmask a whistleblower – a major no-no in post-crisis banking.
World-weary investors would like him to stay, but if the sanction from the Financial Conduct Authority (FCA) and the language surrounding it is sufficiently harsh, he might have to sling his hook.
The most beleaguered bankers, however, are Antonio HortaOsorio of Lloyds and Ross McEwan of RBS. Both men are suffering from a painful thorn in the side: armies of small and medium-sized firms claiming they have been brought low by unscrupulous past banking practices.
Horta-Osorio has been plagued by the HBOS Reading fraud, but the spotlight has switched to McEwan and his handling of the scandal over GRG, or Global Restructuring Group.
An interim report by an independent investigator found that while not guilty of the most serious charges – of deliberately driving firms under – RBS had nonetheless been responsible for widespread mistreatment of its own customers.
Yet the bank is behaving as if it believes itself to be the real victim – of hostile politicians, of bogus victims, of a sceptical media and now even of the ‘skilled person’ who carried out the FCA report.
McEwan recently complained he was tired of the bank being ‘badmouthed’ and said firms could take it to court if they weren’t happy. Now he has written at some length to Treasury Select Committee chairwoman Nicky Morgan criticising the interim report’s findings and methodology. The bank’s supporters also point to controversial elements in the action groups representing victims.
Most people probably think action groups are public-spirited organisations waging a righteous David and Goliath battle. The reality is sometimes less black and white. Such groups are often run by well-intentioned amateurs who may not be versed in good governance. Action groups are not overseen by City regulators and not everyone involved with them is a choirboy.
The presence of such people does not invalidate the cause, but it does give the banks an easy target. The PR firms and lawyers who make good money out of them bear a big responsibility to encourage action groups to run themselves in an unimpeachable way.
Yet out of this woefully imperfect situation there is a workable solution.
Consultations are about to start on extending the remit of the existing Financial Ombudsman Service so it can take on more small firms’ complaints. That is not the full answer to the problem. What is really needed, as we have been campaigning for, is an independent tribunal or a separate turbo-charged Ombudsman – but it is a good first step.
RBS is behaving as if it believes itself to be the real victim in investigation