Justin Welby, who is on committee looking to reform the City, says finance sector can help people and still make money
Executives at Britain’s banks need to operate with a “fear of hell and the hope of heaven” if they are restore the City’s reputation and become better citizens in the future, the the archbishop of Canterbury has said.
Giving the keynote speech in a debate into the future of banking, Justin Welby told a packed debate in St Paul’s Cathedral that the financial community had too often in the past chosen to walk on by, rather than behave like the good samaritan.
He called for the banking industry “to be good”, rather than being motivated solely by financial bonuses and penalties. He said: “There will never be such a thing as perfectly good banks – because in the end no human being is of themselves perfectly good.
“But we can have potentially good banks, banks that live with a culture that is self-correcting and self-learning. A culture that is more like a body than a system.
“We see deep differences in wealth and potential at the moment, they are differences that can be eliminated, but they cannot be eliminated without good banks.”
Welby, a key player in cleaning up the City through his membership of the parliamentary commission on banking standards, set up in the wake of the Libor rigging scandal, warned the financial sector had become too big and had overwhelmed the rest of the economy.
London, he said, now operated in a bubble that bore no relation to the rest of the country, something that had to change. He refused to reveal in detail the commission’s findings, which he said would be published soon.
Welby took a break from private sessions of the commission to make his speech at St Paul’s which took place as the 10-strong members attempt to reach agreement on their recommendations to reform the culture of the City.
He chose to pass when asked to question as to whether the banks were still too big to fail. His commission has been discussing whether to make bankers wait 10 years for their bonuses, introduce new rules to make it easier to send bankers to jail and also require bankers to sign up to a new set of standards.
The commission, whose report is expected in the coming days, may also make recommendations on improving competition in the banking sector. It has examined whether bank account numbers should be portable in the same way that mobile phones numbers are.
In April, Welby told the Bible Society that one way to set up regional banks would be recapitalising at least one of our major banks and breaking it up into regional banks. It was assumed he was referring to 81% taxpayer-owned RBS which Lord Lawson, the former chancellor who also sits on the commission, has suggested should be broken into good and bad divisions.
The Anglican leader, a former executive at oil company Shell, made a largely philosophical speech, knowing that any remarks he made would be scrutinised for clues to the recommendations of the commission.
Previously, he had criticised the City over a culture of entitlement, which left it disconnected from “what people saw as reasonable in the rest of the world”.
Laura Willoughby, chief executive of campaigning website MoveYourMoney.org.uk, told the 2,000 strong audience that 2.4 million customers left the UK’s five biggest banks in 2012, fed up at their behaviour. She got the biggest cheer of the evening when she invited the audience to show the banks what they thought of them and to switch to the mutual sector, telling the banks why they were leaving.
“The constant slew of scandals last year has opened the floodgates, and people are beginning to realise that they don’t have to put up with the arrogance of the big banks. People are switching because they are angry about the lack of reform in Britain’s broken banking system, and have decided to take matters into their own hands.
“This shows that real change won’t come from Westminster or the boardroom, but from ordinary people putting their foot down and saying enough is enough.”
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