A call is going out to every British citizen who wants the financial sector to clean up their act. Move your money from the big banks to local, ethical or mutual alternatives and send them a message in a language they’ll understand.
So, Stephen Hester decided not to accept his bonus after all. You can bet that the Government will be grateful…
But should we be? Should the public submit themselves to the benevolence of individual bankers in the hope that, as bonus season continues, there are more Phillip Hammonds than there are Fred Goodwin’s in the City?
It was always going to be politically unacceptable for Hester to accept his bonus. A public sector worker can’t walk away with a £1million bonus and a ‘long-term incentivisation plan’ worth up to four times that whilst the public face austerity cuts, a squeeze on real incomes and growing unemployment.
But politicians won’t be able lean on Barclay’s Chief Executive, Bob Diamond, when his bonus is announced. Barclays never received direct support from the state; neither did Santander or HSBC for that matter…
The outpouring of public anger over Hester’s bonus went beyond the fact that the state has an 82% stake in RBS. People are genuinely shocked that the bonus culture in the City still hasn’t changed.
If we want to see real change in the culture of British banks, not just a media frenzy and political scrum about one man at RBS, it’s up to us, as citizens, consumers and investors, to take action.
The banking system plays a systemically central role in our economy and society – it provides essential services for households, business and governments. And just like with the utilities, the public have a clear interest in ensuring it functions properly. The continued practice of awarding big bonuses on the basis of relatively short-term performance hardly inspires confidence.
Clearly regulatory and structural reform is needed. The implementation of the Vickers report may shield the taxpayer from the worst effects of future financial crises, and the overhaul of the FSA and Bank of England are likely to improve oversight and consumer protection.
But if there is one thing that the financial crisis should have taught us, it is not to underestimate our own myopia. When the sums involved are large enough, there is always a risk that self-interest will win out over stability and fairness.
The only way of securing a fair and sustainable financial system in the long term is through a paradigm shift in cultural attitudes both inside and outside of the sector.
We need to create a dialogue between the public and the financial system that helps ensure it responds better to the needs of wider society. That’s why Move Your Money, a new grassroots campaign encouraging people to move their money from the big banks to ethical, local and mutual alternatives, launched yesterday.
The campaign is not about bringing down the big banks. The UK has one of the most consolidated banking sectors in the developed world; there is no danger of sparking the collapse of the likes of RBS, Barclays and Lloyds.
But Moving Your Money to an ethical, local or mutual alternative will send a clear message to the big banks that their behavior must change.
We hope that the big banks will see the campaign as an opportunity to engage with the pubic on constructive terms. By being transparent, developing ethically responsible lending policies and adopting business models and governance structures that internalize the needs of customers and wider society – they can regain credibility and trust.
To find out more or get involved visit www.moveyourmoney.org.uk. The next action is A Better Bail-Out: Break Up with Barclays. February 10th will see Barclay’s bonus announcements so at 8.30am we will be lining up outside the Barclays branch, 56 Southampton Road, London, WC1B 4NB to close accounts, sign letters of complaint, speak to the manager and discuss the issues with other Barclays customers. If you can’t make it to London why not organise your own Better Bail-out from Big Bad Barclays outside your local branch?