Salz Review - Wall Street Journal

77
Salz Review
An Independent Review of Barclays’ Business Practices
8.4 Worryingly, trust in banking has also been eroded amongst bankers themselves.
24% of all respondents to a 2012 survey of 500 financial services professionals in the
US and the UK believed that, in order to succeed, financial services professionals
may need to engage in unethical or illegal conduct. 139 A similar number purported to
have first-hand knowledge of wrongdoing in their workplace. The extent of the
challenge was underlined by the preliminary findings from a 2013 multi-country
study of banks by Deloitte which seeks to understand senior bankers perspectives on
the challenge of culture and cultural change in banking. This study has identified that
70% of senior bankers believe that there are significant cultural problems across the
industry and 78% believe the industry would benefit from cultural change. 140
Cultural Challenge Facing Banks
8.5 Senior British bankers have acknowledged that problems with organisational culture
contributed to the financial crisis and to the erosion of public trust and confidence
in banks:
― In October 2010, Marcus Agius, then Chairman of Barclays, stated: “The
leaders of our industry must collectively procure a visible and substantive
change in the culture of our institutions … so as fundamentally to convince
the world once again that they are businesses which can be relied on”; 141
― In October 2012, Stephen Hester, Chief Executive of RBS, said: “Banks must
undergo wholesale change in their culture and refocus their behaviour on
meeting the needs of customers to restore trust in the industry”; 142
― In October 2012, Sir David Walker, now Chairman of Barclays, said:
“Mistrust and the perception of inadequate standards have led to a crisis of
confidence and it is severe. (…) We must not recoil from the shock waves,
rather embrace the current reality and deliver the cultural change”; 143
― In November 2012, Douglas Flint, Chairman of HSBC, said (when talking
about the banks having come to terms with ring-fencing): “I think we have
lost the right to self-determination… It doesn’t really matter whether any of
us think it [the new rules] will be our optimal choice as I think we have lost
the right to determine ourselves what we think the optimal choice is. We can
work with this, and I think the transparency would be good.” 144
139 Labaton Sucharow, United States & United Kingdom Financial Services Industry Survey, July 2012;
http://labaton.com/en/about/press/upload/US-UK-Financial-Services-Industry-Survey.pdf.
140 Deloitte LLP, Culture in Banking Survey, 2013. Deloitte refers to Deloitte LLP, the UK member firm of
Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose
member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a
detailed description of the legal structure of DTTL and its member firms.
141 Financial Times, “Bad actions stick, the archbishop tells city”, 4 October 2010.
142 Reuters, “CEO says banks need culture change to regain trust”, 1 October 2012.
143 Alison Gill, “A Boardroom Conversation with Sir David Walker”, 1 October 2012;
http://www.bvalco.com/a-boardroom-conversation-with-sir-david-walker-1-october-2012.htm.
144 Oral evidence given by Douglas Flint to the Parliamentary Commission on Banking Standards,
5 November 2012.