The majority of people have told us they want bankers to be bound by an independent code of conduct. So we’re calling on the government to create one, and make it a legal requirement for all bankers to follow it.
When people ask me what kind of banking reform we’re looking for at Which?, the first answer that always comes up is that we want to see a code of conduct implemented for bank staff.
After all, doctors, accountants and lawyers have codes of conduct to follow, so why aren’t bankers held accountable when they break the rules?
We’ve lost our trust in banks
We’ve released research today that found 86% of people agreed that the banking industry needs an independent code of conduct to regain public trust. The code should outline the expected professional and ethical standards for bankers, so we’re calling on the government to make the code a reality via the Banking Reform Bill.
Trust in the banking industry has hit rock-bottom. Our survey found that only 6% of people think bankers act in their best interests now, compared to 9% in August 2012, immediately after the LIBOR scandal.
I know that every time I open the paper, it feels like I’m reading about something else the banking industry has done wrong. In the last year we’ve seen IT failures, the LIBOR rigging scandal, and more millions set aside for mis-sold payment protection insurance (PPI).
So it might not come as a surprise that a mere 4% of you think that bankers are likely to act ethically. In addition, only 22% thought that bankers would be removed from their jobs if they lied or cheated. However, 93% of you said your trust in the industry would increase if bankers were struck off for wrongdoing.
We need a legal code of conduct
There’s clearly something wrong in the industry when, following the huge PPI mis-selling scandal, the only senior executive to be disciplined by the financial regulator was the chief executive at Land of Leather!
We think that a code of conduct, with a basis in law, is an important part of changing banking culture and restoring people’s trust. If a customer or an employee of a bank thinks a member of staff may have breached the code of conduct, they should be able to report them to an independent body. This body should be able to punish or strike-off bankers that have broken the code, including those who have acted dishonestly or have knowingly mis-sold a product.
The Parliamentary Commission on Banking Standards is expected to release its report on banking culture next month. We want it to recommend that the government implements a code of conduct for bankers backed by law, to make it a code with real teeth.
What rules or principles should be included in a bankers’ code of conduct? How can the banks regain your trust?