FT cites Douglas Flint, Chairperson of HSBC:
“… an observable and growing danger of disproportionate risk aversion creeping into decision-making in our businesses as individuals, facing uncertainty as to what may be criticised with hindsight and perceiving a zero tolerance of error, seek to protect themselves and the firm from future censure”.
There is unlikely to be much sympathy for the hassled and harried bankers, as he may like to portray them. If it was a subtle hint for regulators to back off, there was nothing subtle about it. It may even backfire. Banks brought it upon themselves. Given an opportunity to self-regulate in the new millennium, they botched it. Big time. Ethical behaviour is conspicuous by its absence even now.
Banks always made a huge song and dance of compliance. Holding training sessions, making attendance compulsory and asking every one to sign on the attendance register and take exams on the Compliance training, etc. while some of the colleagues were busy manipulating LIBOR, FX and Precious Metals Fixing.
Banks are still not introspecting enough. They have not understood that their time has come and gone. Strangely, his remarks reminded me of Chuck Prince’s ‘As long as the music is playing, everyone has to get up and dance’, made in summer 2008.