THE banking sector must show "contrition" for past failures and
rediscover "a culture of the virtues", the Church of England's
Mission and Public Affairs Council has said, in written evidence to
the Parliamentary Commission on Banking Standards.The Commission was set up by MPs in the wake of the Libor scandal in July, to look at the professional standards and culture of the UK banking sector.
The Bishop of Durham, the Rt Revd Justin Welby, is a member of the Commission, which is composed of five MPs and five peers.
The MPA Council's submission states: "The question is not whether systems have been adequate to identify and deal with the bad apples, but whether the whole orchard needs replanting."
It goes on to say that the restoration of public trust in the banking industry "is not just a matter of technical 'fixes', but may require public, corporate contrition for past failings, demonstrably robust structures to ensure that old mistakes are not repeated, and possibly some symbolic steps to assure the public that the corporate culture has changed".
The Council says that "the culture of banking has lost touch with matters of virtue". Bankers show a "blindness to the common good", and are disconnected from the "concerns of a wider community and society".
The Council issues a strongly worded attack on the "bonus culture" in the City, in a similar vein to the Church of England's Ethical Investment Advisory Group, which has said that there is a "systemic problem" of excessive pay for company executives.
The Council states: "The headline salaries, bonuses and remuneration packages of very senior bankers . . . [have] gravely harmed the public perception of banking. . .It reflects a deeply felt and sound belief that what has happened is unjust. The fact that those who presided over actions by their banks that were disastrous for the common good walked away with large pay-offs has simply fuelled the damaging notion that the whole culture of banking conspires to facilitate personal greed, with huge rewards for success and only slightly smaller rewards for failure."
The submission goes on to argue that the perception of banks as "friendly, family-oriented institutions" has "taken a possibly terminal blow".
The Council also criticises the "impersonal nature of financial trading", which has "tended to detach trading from being a transaction between persons and to obscure any sense that whole communities might be directly affected by a particular transaction".
It warns about the plan to separate retail and investment banking if it creates "an ethically mature and consumer-friendly retail sector sitting alongside an even less well regulated and socially irresponsible investment banking sector than in the past".
And it urges the Commission to look at ways to "restore the human scale of banking and rebuild relationships between banks and local communities".
The RC Archbishop of Westminster, the Most Revd Vincent Nichols, said last week that "a market economy driven purely by the pursuit of profit does not necessarily serve the common good, but may actually harm it.