Bankers have chance of redemption

One of the main reasons the public found it so easy to pillory bankers after the crash was that most of us had become used to being treated like mugs by the high street's highwaymen.

So when we had the evidence that bankers had mismanaged their own businesses so badly that they became insolvent, yet still paid themselves the most egregious salaries and bonuses, it didn't come as too much of a surprise.

It's perhaps unfair that all bankers got tarred with the same brush - retail bankers didn't earn anywhere near as much as high-rolling investment bankers - but they were all part of the same money-making machine which was, de facto, cheating its customers.

Sir Fred Goodwin became a hate figure for many, while, on Wall St, protesters burned effigies of their bankers. Customers had always suspected they were being cheated, but the crash gave them proof.

And the banks are up to some of their old tricks again. Today, they are still trying to sell you loans at exorbitant interest rates, and still grabbing huge fees on overdrafts.

They also take charges out of your accounts directly without sending you a bill first. What other business can do that? Banks are charging overdrafts at 12 to 19 per cent, while credit cards average 18 per cent when base rates are 0.5 per cent. Even a child could see that this is daylight robbery.

But a sound and trustworthy banking system is fundamental to any society, and even more vital today as Britain struggles to rebuild the real economy and get credit flowing again.

That's why it was so heartening to hear Stephen Green, the chairman of HSBC, in his lecture at the Mansion House last week to the Tomorrow's Company consultancy, admitting that the financial crisis has taught the industry many new lessons - "the importance of values in delivering value" being the most crucial of all.

As a committed Christian - Green is a lay preacher - he has perhaps more of a reason than most bank chiefs to be a mover in putting right what went wrong with the sector. Green accepts the market is flawed - knocking the arch-proponent of market fundamentalism, Milton Friedman, for his belief in putting shareholders first.

Green, an optimist, hopes that if bank chiefs reform their culture into a values-driven one - shared from chairman to shop-floor - they should be able to restore trust in the market-based system.

He quotes former Czech president Vaclav Havel: "Without commonly shared and widely entrenched moral values and obligations, neither the law, nor democratic government, nor even the market economy will function properly."

Green is right, and Havel's wise words spot on. But is changing the culture enough to prevent another crash? For now, banks are still learning to live with tougher capital requirements and regulations.

We won't know the answer until next year, when the Banking Commission reports its findings on whether we should be looking at root-and-branch reform.

- INDEPENDENT