BRITAIN’S most senior bankers yesterday launched an impassioned plea to colleagues to unite in banging the drum for the industry, arguing that accepting past failings goes hand in hand with standing up for their vital role in the economy.
Royal Bank of Scotland chief executive Stephen Hester challenged delegates at the British Bankers’ Association annual conference to “make the case” for the industry while accepting the need for change.
“We must listen to concerns and understand the anger we have faced over the past two years,” said Hester. “[But] we must commit ourselves to explaining that we are here to serve our customers and the broader global economy. We are making a vital contribution, and it is our job to make sure that contribution is understood.”
Hester’s remarks came as speakers at the conference tore into Europe’s Basel III proposals, which will introduce stringent new capital and liquidity requirements for banks to protect against a future financial meltdown.
Stephen Green, the chairman of HSBC, said that “delicate judgments” would be needed on the details and the implementation timetable of the Basel III rules if the world is to avoid “choking recovery and plunging into a new credit crunch”.
Royal Bank of Canada boss Gordon Nixon added that national regulators should be able to use more discretion in applying the rules, at the risk of compromising economic growth and pushing up prices for consumers.
Bankers at the conference also lashed out at proposals to split up institutions deemed “too big to fail”, claiming that size and structure of banks and proprietary risk-taking did not cause failures during the crisis.
Green said there was “no correlation” between the size and structure of failed banks, though he pledged support for resolution regimes and living wills to ensure orderly wind-downs in the case of failure.
Hester added that lending to companies and individuals was the biggest loss-maker for banks, not proprietary trading activity, which has come under fire from policymakers for putting banks’ capital unduly at risk.
“[Bank losses] overwhelmingly involved some kind of customer intermediation – not proprietary risk taking for its own sake,” he said.