Bankers’ crocodile tears will not wash


It was a bright July morning in Beverly Hills. Kristen Stewart rose early and left the three-bedroom house that she shared with her boyfriend and fellow film star Robert Pattinson and headed for the city.

At some point that morning, she picked up Rupert Sanders, the man who had recently finished directing her in the movie Snow White and the Huntsman. The couple then spent the rest of the day cruising around LA looking for “secluded places to make out” – as one gossip magazine later described it under a series of salacious photographs of the encounter.

Within a few hours of the pictures appearing on the front cover of People magazine, Stewart issued a short, heartfelt statement: “I’m deeply sorry for the hurt and embarrassment I’ve caused to those close to me and everyone this has affected. This momentary indiscretion has jeopardised the most important thing in my life, the person I love and respect the most, Rob. I love him, I love him, I’m so sorry.”

Irrespective of whatever Stewart had been up to over the past weeks, the statement left no doubt that she had made an enormous error. Even the most cynical of observer would struggle to read that statement and not be just a little bit moved by the plight of the young movie star.

Now compare that with the insincere world of global banking. Ever since the global financial crisis, most of the major banks have been beset by scandal. Their CEOs and senior executives have found themselves in Stewart-like situations of contrition. And yet what a 22-year-old woman found so simple and plaintive to do last week – apologise profusely – has proved to be entirely beyond the titans of banking prowess.

Take HSBC as an example. Senior executives have recently admitted that the bank had likely been exposed to billions of pounds from Mexican drug cartels, organised crime and terror organisations. This is serious stuff and yet the response from David Bagley, who had been in charge of compliance at HSBC since 2002 and who announced his resignation at a US Senate hearing last month, was hardly effusive. “In hindsight,” Bagley told the hearing, “I think we all sometimes allowed a focus on what was lawful and compliant rather than what should have been best practices”.

While Bagley was resigning from his position (but keeping his job at HSBC), his former boss Lord Stephen Green, who was chief executive of the bank between 2003 and 2006 and chairman until 2010, was also being drawn into the scandal.

A US Senate investigation into HSBC under Green’s control found that money laundering was allowed to occur because of the bank’s “pervasively polluted” culture. But Green claims he has “no case to answer” for the bank’s failings and feels he is perfectly qualified to remain a UK trade minister.

It’s a similar tale at JP Morgan. When CEO Jamie Dimon addressed investors in April and disclosed a series of loss-making trades by the bank’s London team, he dismissed them as a “complete tempest in a teapot”. A month later, when it was clear that the losses would total at least $2bn (£1.27bn) and possibly a lot more, Dimon was more contrite. “We will admit it, we will fix it and move on,” he said. But when asked at the end of the call what, in hindsight, he should have paid more attention to, Dimon replied: “Newspapers.”

HSBC and laundering. JP Morgan and hedging. Barclays and Libor. Goldman Sachs and CDO trading. RBS and IT crashes. Always a different bank. Always a different problem. But the same arrogant response emerges each and every time.

First, the bank issues a vague admission of guilt. If that does not do the trick, it issues a more contrite version. There are some generic claims of “organisational change” and promises of “self-reflection” but no-one ever actually accepts responsibility for the matter. No-one steps down from their position – the only reason Bob Diamond left Barclays was because the Bank of England gave him no choice. An apparently huge fine is then paid. Within weeks, however, that figure is dwarfed by the quarterly profits of the bank in question and we return to the start for the next round of misdeeds.

If actor Kristen Stewart had taken a banking approach to her recent dilemma, the statement she would have produced would have gone something like this: “I fully appreciate that errors were made that afternoon. In hindsight, those responsible committed actions that were inconsistent with my personal beliefs. I have thought deeply on the matter and realise that although mistakes were made I cannot and should not take responsibility for what was, ultimately, a result of a multitude of factors. It’s now time for me to return to my relationship with Rob. He has been informed of my decision and I have apologised to him. I expect Rob to propose to me in the near future.”


Ruth Mortimer

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