Yesterday the European Commission fined RBS £324m for Libor rigging. Barclays avoided a fine as they were one of the Whistleblowers, a strange kind of "reward" for bad practice but good incentive for others to come clean.
If you review some of the fines/compensation imposed by the Regulator over the last year or so the argument for everyday business ethics, ie everyday well-considered decisions, is clear. The PPI mis-selling scandal alone has cost the financial services industry c £15bn . The FCA has also fined the likes of Swinton £7.38m, PAS £ 2.8m and CPP £10.5m (with c £1.3bn compensation across the 13 high street banks associated with CPP's mis-selling). This is without even looking at the energy market where the likes of SSE were fined £10.5m earlier in the year, again for mis-selling.
One of the key arguments for business ethics is cost and risk reduction particularly minimising the risk of greater regulation. The FCA's focus on "conduct" now means a much greater emphasis on internal behaviours and the conduct/behaviours of other stakeholders. While these are all judgements about past mis-management/"misdemeanours" the financial services sector really needs to deliver some on-going good news stories sometime soon to build up its tarnished and ever sinking reputation.
No comments:
Post a Comment