Investment banks just don’t get it
August 28, 2009
A group of young bankers (of which we are part) is promoting a dialogue on the future of banking in The Netherlands. We argue that banks should first and foremost be service minded; the client comes first. Banks also have to be transparent. Moreover sustainable: guided by social and environmental principles and with an eye for the future. Moreover the economy needs different sorts of banks and bankers with diverse backgrounds. These are four elements that we deem crucial conditions to maintain being the much needed engine for the national economy in a way which suits society.
It is incredible and unacceptable that Anglo-Saxon investments banks seem to belief that there is no need to change. Despite recent government bailouts huge amounts are being set aside for bonuses. Goldman Sachs is reserving $ 11,4 bn. In the second –loss generating- quarter Morgan Stanley reserves 72% of net income for bonuses. The American government has only recently been repaid and as a token of gratitude it gets the same behaviour as before the crisis. Ironically, these investment banks are looking forward to making lots of money by servicing the government’s debt refinancing which is partly caused by these same institutions.
Dutch banks have to show that they are wiser. They should not only recalibrate their position in the economy, but also in society. The real question for them is ‘what fundamentally defines our reason for being?’ To service clients in a way which is relevant both economically as well as from a societal perspective, is the general answer. On the basis of its specific profile and vision, each bank has to specify this answer.
Attempts to pin-point the responsibilities of banks by regulation and law are well understood. However, a healthy bank sector first and foremost needs an ethical framework and strong leadership that acts on the basis of values. For it has become paramount that ‘no values’ translates into ‘no value’. By taking the initiative the banking sector can aim to regain (some of) its credibility and hopefully prevent being muffled by governmental regulations. The “Committee Maas report” has been a necessary step. However, more is needed. Our group of young bankers hopes that our initiative to ignite dialogue and discussion will contribute to a banking industry of which both clients and society as a whole will be proud again.
(This blog is a reflection of an article which was written together with Manuel Adamini, Head of ESG-research, SNS Asset Management )
Share this article with :
Comments on this blog
There are no comments on this blog