South Africa’s Truth and Reconciliation Commission was a restorative justice body which took place after the abolition of apartheid. Witnesses were able to give an account of human rights abuses which had affected them. It is generally regarded as a success, although it has its critics (mainly on the grounds that perpetrators escaped justice as a result of the commission).
In the case of the banking crisis, there is little sign (in the UK) of perpetrators facing justice or any other form of professional sanctions.
As pointed out by Gillian Tett in a recent FT piece, it remains hard to explain why no one has been hauled before the courts or suffered professional sanctions for the events that led to the banking crisis. This was not the case in previous financial crashes, when instances of irresponsibility and malpractice were no worse.
It seems clear that both the previous Labour government and the Coalition government have had no wish to turn over stones, or to get to the heart of the causes of the crisis and the behaviours of senior bankers. There was press interest at the time of the failure of Royal Bank of Scotland, and public opprobrium for ‘Fred the Shred’. There has been continuing media interest at the scale of bonuses in the financial services sector.
The response from the City has been to call for an end to ‘banker-bashing’ and to insist that it is time to ‘move on’. The long gap between the initial crash, and the real impact of the 2011-14 public expenditure cuts, has lessened the connection between the two in the public’s mind.
Yet public resentment is now growing again, as the long-term impact of the cuts become clear and as more evidence surfaces from the experiences of Greece and Ireland. The UK government may have been operating (pre 2010) at levels of public expenditure unsustainable in the long-term, but things did not have to get as bad as they now are. Bank failures, and subsequent bail-outs, have played a part. Issues over levels of corporation tax paid by banks, as well as bonuses, remain highly visible. Structural reforms, at UK, European Union, or global level move with glacial slowness.
Do bankers want to be ‘reconciled’?
As in South Africa, we have reached a situation in which one slice of society chooses to operate to different principles and values than the majority. Differentials of income within what was once a relatively coherent ‘professional class’ in the UK covering doctors, architects, lawyers, teachers and bankers have widened enormously in te last two decades. From the viewpoint of most of the public, bankers now reside on another planet.
Is there any sign that they wish to rejoin the rest of society? Evidence to date suggests not. They guard their bonuses and threaten to leave the country for more sympathetic regulatory environments, at the first hint of Government intervention.
And yet. Is it unrealistic to hope for some change of heart? Will a younger generation, entering the financial services industry, prove to be quite as rapacious as their predecessors? They have seen something of the toll taken by an undivided focus on greed.
Teach First is now ranked one above HSBC in the Guardian ‘top 300′ of desired careers. Lower down the table, Cancer Research at No.43 is one above Goldman Sachs.
For the baby boomer generation, still firmly embedded in control of the City, might there be some chance of contrition and acknowledgement that they have not handled things as well as they could, and that the general public are suffering as a result?
A ‘truth commission’ would succeed only if there was an element of reconcilation, of coming together, over its findings. By establishing a commission of professional peers, interrogating their counterparts as equals in terms of expertise and experience (and the handling of risk) the aim would be to achieve some mutual recognition and understanding of what different professions bring to the table.
Banking behaviours would need to change as a result. For the banking community, any benefits to be gained from a public acknowledgement of the mistakes and arrogance of recent years are not immediately obvious. Why should they change their ways?
The rewards may be intangible. Sleeping a little easier at night. No more being the subject of public contempt on the street, or teased at Holland Park dinner parties. Wives no longer given looks of envy or contempt at the gates of their exclusive schools. Less risk of social isolation, meeting only their counterparts in a narrow, super-affluent world.
One way or another, there needs to be a shift. It cannot be healthy for one part of society to continue to exploit the remainder, for its own ends, and hence to remain so separate from its fellow citizens. That path leads to gated communities, private security, and bullet-proof vehicles, as already evident in other global cities wedded to turbo-charged capitalism and beginning to appear in London.
There has to be a better way.