A speech by Lionel Barber, Financial Times editor, at Hughes Hall, University of Cambridge, May 1, 2014. An accompanying video can be viewed here.
Ladies and gentlemen, distinguished guests, I am delighted to be here tonight at Hughes Hall in the University of Cambridge. This is the prestigious City lecture, but sadly I will not be providing slides. As Lord Acton might have said, power tends to corrupt, PowerPoint corrupts absolutely.
Tonight I want to talk about bankers and banking. These days, bankers are widely viewed as greedy, self-serving, amoral or actually dangerous. Estate agents, even journalists, are held in higher regard.
This past week’s kerfuffle over bonuses and remuneration at Barclays and Royal Bank of Scotland is a reminder that bankers continue to be held responsible for the financial crisis and the economic calamities which followed.
Bankers appear to be living in a parallel universe, where the rewards are far out of kilter with what the rest of society can expect. This speaks to a deeper unease about inequality which explains the unlikely best-seller on economics, Thomas Piketty’s Capital in the Twenty-First Century.
My questions tonight are: Can bankers mend their ways and their reputations? Is there a path to rehabilitation? Read more
You’re about to hear a lot more about “good banks” and “bad banks”. The report from the parliamentary banking standards commission, due on Friday, and Stephen Hester’s departure from Royal Bank of Scotland will reignite questions such as whether RBS should be split into “good” and “bad” operations (Mr Hester opposed this).
Running in parallel is a philosophical debate about how you ensure banks are “good” – in the sense of having a strong, positive purpose.
But there is also the question of whether banks that do good are always good banks. Read more
The modern manual of chief executive apologies for corporate cock-ups is short: 1) say sorry, 2) stress customers are your priority, 3) praise staff for working hard to solve the problem, 4) say sorry again. Repeat, ad nauseam.
Royal Bank of Scotland’s Stephen Hester managed to follow these simple rules on Monday in his first public appearance since a software failure left millions of customers of RBS, Natwest and Ulster Bank unable to access bank accounts or make transactions. In an interview with Sky News, he was serious, he was plain-spoken and he was in Edinburgh. This last is important, not only because jet-setting while customers suffer is a bad look for a banker, but because there is already an undertone of complaint that an RBS decision to outsource IT services may be to blame for the problem – something Mr Hester denied. Read more
A highly paid manager doing his duty for the nation resigns in a huff after his ultimate paymasters interfere with his right to manage. Fabio Capello, manager of the England football team, has done what Stephen Hester, chief executive of state-controlled Royal Bank of Scotland, declined to do.
Mr Hester – who spent most of Wednesday doing interviews to explain his decision to stay, despite the row over his bonus – has told the world that it would have been “indulgent” to resign. At the same time, he has sent a strong message to the government that if it wants to earn a return on the taxpayer’s £45bn forced investment in RBS, it should leave him alone.
To use Mr Hester’s terminology (and assuming that the England manager jumped and wasn’t pushed), by comparison, Mr Capello’s decision looks, frankly, indulgent. If the FT’s Simon Kuper is right, the resignation has less to do with the Football Association’s decision to override his view on whether John Terry should keep the England captaincy, and more to do with England’s poor prospects in the coming Euro 2012 tournament and the potential that it would put a blot on Mr Capello’s reputation. Read more
The Los Angeles Times story about the humiliation of Fred Goodwin describes Britain as “a land where essentially feudal titles still carry great prestige”. True-ish. But I have to say that the UK doesn’t do business honours like it used to.
I’ve dug up this extract from the FT of January 2 1912 – and no, as you’ll find out if you follow that link, I’m not making this up: Read more
By James Mackintosh, investment editor
Arise, Mr Fred Goodwin. The banker who single-handedly brought down the British banking system has had his knighthood stripped away, and no one is sorry. Politicians, the public and the press are united in supporting the move against the former chief executive of Royal Bank of Scotland.
The pitchfork-wielding mob is wrong. Read more
Politicians would like to think that Stephen Hester’s decision to give up his bonus marks the start of a mass renunciation of “excessive pay” by private sector bosses. It is certainly time the UK corporate and political world moved on and refocused on what is really important: i.e. how to restore growth. But far from starting a trend, the Royal Bank of Scotland CEO’s case is unique. Here are three reasons why: Read more