Heading to the tumbrils?

The U.K. press and body politic this weekend came as close as they could to calling for the populace to rise up and lynch a banker. This occurred after a week where several banks were found guilty of mis-selling interest rate swaps to SMEs and another bank guilty of alleged manipulation of LIBOR rate fixings.

The U.K. press and body politic this weekend came as close as they could to calling for the populace to rise up and lynch a banker. This occurred after a week where several banks were found guilty of mis-selling interest rate swaps to SMEs and another bank guilty of alleged manipulation of LIBOR rate fixings.

This is not a good time to be a banker. I have a horrible feeling that I should erase the word bank from my passport, my CV and any conversation I have outside the Square Mile or Canary Wharf. There has undoubtedly been both unethical and irresponsible behavior by some bankers over the years. Some senior executives have been lax in their oversight of the moral standards of their businesses. But both scribes and politicians are wrong to describe the City of London (and by extension wholesale bankers elsewhere) as living in moral cesspits and being criminals.

I, and, to the best of my knowledge, my colleagues, always strived to deliver value to our clients. We cherished our integrity. Indeed, in our business, our future depended on it. At NeMa 2012 last month, in my chairmans address, I highlighted the need for banks to put any semblance of the Gordon Gekko school of banking behind them and to abide by the highest standards of behavior.

Over a decade or so at the helm of HSBC Securities Services, my colleagues and I created real value for all stakeholders. We grew ten-fold over my 14 years in charge and worked with regulators and others for the good of our clients, business and organization, even though we did not necessarily always agree with the strictures they imposed.We created new business lines in the U.K., business operations in emerging markets, promoted best practice throughout our franchise at market and organizational levels and were, I believe, respected by our stakeholders throughout the world.

Yet the feelings of pride I have always had at what we all achieved during those years are being subsumed by anger at the blanket condemnation of all things banking here in the U.K. I talked last week to a young banker in a much-criticized U.K. bank, and they said they could not see their future in the U.K. At their age and in this adversarial environment, I suspect I would have felt the same. One has to ask if this is really in the interest of the U.K. in general and the City of London in particular given the value we brought to the community during our years of honest hard work, compliance with regulatory direction and, above all, business growth. At a personal level, we all paid our full tax obligations under the U.K. Pay As You Earn system, and, in the case of senior management, lost between two and three years bonuses in the naughties when the shares failed to deliver the requisite performance to our fellow shareholders.

There are some nasty people in banking (and in politics or journalism as recent events in the U.K. have shown). But the majority are honest and hardworking. They dont want to cheat their customers. They dont want to cheat the tax collector. They dont want to breach regulations.

But, as a quid pro quo, they ought not to be vilified as if they were part of a heinous breed. Or, as the young executive from that much-criticized bank suggested, they will move away to a country where they are not seen as automatic social pariahs by association with the word bank.

Let me be clear. Some bankers, and I believe it is a genuine and not necessarily particularly senior small minority, have behaved badly and must be punished. If their actions are criminal, the law should be applied with full force. If they have breached regulation, they should be punished accordingly perhaps disbarred from the industry. But lets get a sense of proportion before we go that step too far, which would make London the wrong location for many of our business lines. Just like the manufacturing industry, any exit will be gradual but the long-term consequences horrendous for the country as a whole. Wholesale banking is highly mobile, and, at the moment, it looks as if it will need to be.

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