Bank Ethics (and trust).

I feel that I may (repeat may) possibly have had a small influence in the Australian Banks decision to "allow" a Banking Royal Commission - I'm not boasting mind!! Some weeks ago I wrote to the Australian Bankers Association and I offer this contribution for those interested to read:-

The Chief Executive Officer

Australian Bankers' Association
Level 3, 56 Pitt Street,
Sydney. NSW 2000

Dear Ms Bligh,

Re: Bank Ethics (and trust).

I am sure I need not remind you that it is obvious, not just to me, that the lack of ethics and morals evidenced by banks in Australia needs to be addressed. Banks, ALL banks, direct their activities at preserving and protecting shareholders, their “market position”, their liquidity and their profitability, with SERVICE and the poor old CUSTOMER way down the list of priorities.

We have had, in the recent past, the terrible social effects of the blatant greed and moral shortcomings evidenced by Wall Street banks in 2007-2008, (the GFC); we have had the LIBOR scandal in London; we have seen many billions of dollars in penalties paid by banks world-wide for aiding and abetting questionable financial transactions - now it is the Australian banks falling foul of the regulators, the public and politicians.

So far all four of Australia’s biggest banks have allegedly been guilty of breaching laws and regulations set by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). The banks have been variously accused of defrauding customers through questionable investment advice and dodgy insurance cover, rigging the Inter Bank Rate, lacking moral judgment and generally being unethical in their dealing with their customers money.

I will reiterate what I have said before, many times, that without customers (people) there would be no money, no need for banks and therefore by default, no need for shareholders. Money is not “self-emergent” – it is a human construct.

Pursuing the logic of this it would appear to be a “no brainer” that customers (i.e. people), are the vital part of the banking system, not just in Australia but world-wide. It should be a simple case of “look after the customer” first and foremost, legally, ethically and with moral undertaking. Do this and the money will look after itself. And what is of utmost importance, trust in the banking system would be restored and banks would no longer invite opprobrium and be considered “bastards”.

This will require a cultural shift  - the “fiduciary culture” - by all concerned, starting with the boards of directors, chief executive officers and managers. Until all these people conduct themselves with ethical and moral underpinnings nothing will change.

Unfortunately, for all concerned, until there are changes, banks will continue to be mistrusted and reviled.

I will be very interested in any response you may offer.

Yours sincerely

Andrew Campbell-Watt

Tall Poppy Syndrome

We never seem to learn do we – "we" as in the human race I mean. Something like 2500 years ago Herodotus, the Greek historian (born c 484 BC and who died sometime between 421 and 415 BC) stated in his famous “The Histories” that:

“It is always great buildings and the tall trees which are struck by lightning. It is God’s way to bring the lofty low.... For God tolerates pride in none but Himself.”

He was referring to humans and how we try to gain some, often unfair, advantage over our fellow being. This is of course usually in the context of money (what’s new?). Herodotus also recorded that the Greeks had astutely observed the fact that:

“Human prosperity never abides long in the same place.”

To my way of thinking all human life has one purpose and one only – the well being of humanity. And I wonder whether all the technological advances we have made, and continue to make, on an exponential growth pattern, actually do HELP humanity. Money is very useful in this regard if used to assist those in need – to purchase their requirements. But do we need huge arsenals of weapons; do we need to spend countless billions on developing new or more ‘refined’ ways of killing each other? Wouldn’t it be much better to spend this money trying to right some of the wrongs and injustices of the past, to the extent that those who may have felt they had been treated unjustly or in some other way wronged, feel compensated and have no need to take further action?

The three basic requirements of humanity seem to be slipping further out of the reach of many – adequate food, adequate shelter and personal security. These still seem to elude the one billion people (according to the World Health Organization) currently at the point of starvation, who often live in the most hazardous regions – particularly South America, Africa, the Middle East and South East Asia. So what are the wealthy doing about it?

As I said before the purpose of human life is to help humanity. Why aren’t we doing it? There is enough food thrown away in the developed countries to feed all those in need. Are we those “great buildings and the tall trees” to be laid low by God because He “tolerates pride in none but Himself?” To consider oneself ‘above’ or ‘better’ than others, who are starving with lack of shelter and without any personal security, is surely ‘pride’; is surely ‘hubris’.

This, surely, is pride asking for a fall?

Also consider the observation that “Human prosperity never abides long in the same place.” It would seem that not many in Wall Street read Herodotus or if they did they didn’t think it would apply to them – they cared for no one but themselves and the money they were ‘making’ through their obscene commissions (vide the 2008 Global Financial Crisis). Certainly, I would guess, the Australian banks and insurance companies thought they were above all this ‘nonsense’ – how wrong they were (they also obviously never read Herodotus).

If you follow my thinking that as humans our main purpose in life is to help our fellow beings you will understand my continual reference to the "Law" of Cause and Effect (or if you prefer, You Reap What you Sow), and to the importance of ethics in our relationships. It is needful to be always fair, honest, kind, compassionate, empathetic, moderate and just in all our dealing. To be anything else is to invite the Gods to cut you down to size and to ‘bring the lofty low’.

In colloquial English - call this the ‘tall poppy’ syndrome – and in Australia at least we seem to take a perverse pleasure in seeing the ‘self promoted mighty’ laid low and cut down to the size of normal human beings.

Wall St Road Kill

Why do I get the feeling that America has lost something during the last two weeks of financial carnage? Something that will take a long time to regain and that is the “Moral High Ground”. The American moral high ground has not been very high for some years now (think Abu Ghraib and Guantanamo Bay, and not being bound by the World Court decisions), but the last few days, to me as an interested and concerned outsider, has seen the US of A become another Wall St road kill victim.

The last thing I want to do is to seem sanctimonious or “holier than thou”, but if you forget people, and ignore humanity, in the broadest sense, then sometime down the line you are going to cop a hiding. If you ever think that you are better than anyone else, or know better, or put money or possessions before the welfare and well being of human beings, you might as well light a fuse – put a match to the blue paper and commend yourself to your ancestors. Ignore humanity, forget about people and something unpleasant is going to happen to you. It is just a matter of when. Dealing with people is about ethics, about building trust, about treating people the way you would like to be treated. Ethics is not a disposable item to be used only when deemed expedient.

People used to be taught from the fables and myths of the past. Not many read Aesop any more – more is the pity. Read this one, there is a lesson in it somewhere:

Aesop’s fable (CIV)

The goose with the golden eggs

Their was once a man who was lucky enough to own a goose that laid him a golden egg every day. However, since the process was so slow and since he wanted the entire treasure at once, he became dissatisfied and eventually killed the goose. After cutting her open, he found her to be just what any other goose would be.

The more you want the more you stand to lose