Russell Lynch: UBS's Kweku Adoboli shows bank culture still needs to change

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We’ve heard a lot of rhetoric about changing the culture of banking since the crisis, but judge people by what they do, rather than what they say.

UBS’s rogue trader Kweku Adoboli’s verdict that the “profits-first ask-questions later” culture is still alive and well in the banking world is depressing, but hardly a bombshell. 

The pressure traders are under to deliver means a repeat is “absolutely” possible, he argues. 

For all the motherhood and apple pie spoken about changing values, the banks are fully aware of the risks; they’ve been hiring in droves from the likes of MI5, GCHQ and the CIA in order to keep track of their employees. 

When “conduct” risks are so huge — £250 billion around the world in fines and compensation racked up to the end of 2015, according to research — it’s sound business. 

Barclays chief executive Jes Staley, for example, may talk about “promoting a strong values-driven culture” (though much good it did his sacked predecessor, Antony Jenkins) but his spooks are also crawling all over the electronic fingerprints of staff to “identify any potential issues before they turn into anything troubling”, in the words of one of them. 

So too Credit Suisse, which formed a partnership with the CIA to help catch rogue employees before they can harm the bank. Adoboli could have sunk UBS with his illegal activity, and though remorseful, interestingly he says: “I don’t think of myself as a criminal.”

Realistically it’s hard to see the industry ever achieving its “values-driven culture” without action to address the way financial salaries have spiralled away from the real world. 

Every industry attracts bad eggs; but the rewards on offer from banking are so high, and the penalties for failure so brutal, the temptation to cover your tracks when things start going wrong must be huge.

King’s out of step

In the Citigroup C-suite, bosses will presumably be glossing over most of what former Bank of England Governor Lord  (Mervyn) King actually said about bankers when he is wheeled out to impress a client  or two in his new role as its senior adviser.

How about this? “If banks feel they must keep on dancing while the music is playing and that at the end of the party the central bank will make sure everyone gets home safely, then over time,  the parties will become wilder and wilder.”

That was a direct rebuke to Citi’s ill-fated chief executive Chuck Price, who said early in the subprime lending crisis that “as long as the music is playing, you’ve got to get up and dance”. Awkward.

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August 1, 2016 |
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