12/06/2012

Ethics and fair practices in the banking industry


A friend of mine, a senior banker, attended a bankers’ dinner several years back. The Guest of Honour was none other than Jackson Tai. In his speech he stressed on the need for ethical and fair practices in the banking industry and he lamented at the lack of it. Some banks were big culprits in violating all the rules of decency to take advantage of a situation, of clients and customers, just to shore up their bottom lines. I was kind of huh, how could respectable bankers be so unscrupulous? I choose to take a neutral line, half believing until proven otherwise.

One of the ugly practices of the banks was to steal clients from competitors by undercutting on the commission. Some bankers even stooped to such practices within the same bank, stealing clients from their peers and associates. It was nauseating that bankers could behave in such despicable and unethical manner in an industry that places great importance to honesty, sincerity, trust, ethics and fair play. This cannot be true either.

What was silly was that the undercuttings ended with the banks getting lesser returns than before from existing clients that were already customers of the banks. And according to this banker, the top management of banks did not even know that they have short changed themselves while throwing away all the good practices and human decency, to look good for some individuals or departments or the bank. Further, for doing so, they exposed themselves to anti competition practices that could bring forth a lot of embarrassment if reported in the media. But these were in the past. Thank God.

Would history repeat itself, that banks would compromise their integrity and reputation to steal clients in unfair and unethical ways? Hopefully this will not happen again as the bankers were supposedly dignified professionals and men and women of great honour, trustworthy and respectability. Indiscretion of such nature is taboo in the industry and beyond them.

I rather be naive and innocent to believe that bankers will be above unethical practices and will live to their reputation as honourable and reliable professionals of the most important industry that touches all industries. I still believe in the perfect picture, of wholesome goodness, that all things are well beneath the superficiality.

I believe that no bankers would compromise ethics and morality to indulge in silly practices that are short sighted and could bring them down with dishonour just to shore up the bottom line.

I believe that the Competition Commission of Singapore would be watching such violations closely and that they know that everything is fine.

I believe that what is happening in the US where banks would cheat their clients by recommending them rubbish products that banks wanted to get rid off, or churning the accounts of their clients for profits would not happen here.

I also believe that before the Dodd Frank Law comes into effect, our banking system will do the necessary to observe the decency and propriety that this law is supposed to do and avoid a conflict of interest the law intends to stop.

I also believe that the banking industry is in good hands, run by honourable men and women.

16 comments:

Anonymous said...

Banksters - love em or hate em - they are the new Mafia thugs preying on society.

Veritas said...

Today, Singapore has became the fraud capital of the world. For the past few months, banksters in SG have been exposed of rigging LIBOR, very often at the behest of FT boss. The Status Quo hush up everything and tried to play down the implications of LIBOR-gate.

Rigging LIBOR is million times more serious fraud than what Nick Leeson or Chen Jiulin or Tan Khoon Swan did. LIBOR affects trillions of dollars of derivative pricing. Till now all the culprits are still walking free.

LKY see Singaporeans as stupid Dalits. But it is his pet FT who are shown to be stupid, wicked and greedy. All those who blown up big time are FT, including Nick Leeson, Chen Jiulin and lately the clowns from Olam. (Oh no, I missed out, Ho Ching and Tony Tan, who was related to LKY due to were even a larger dynamite)

Chua Chin Leng aka redbean said...

Hi Veritas, you have very strong views and getting angrier by the day.

Anonymous said...

Morning rb,

Your sense of idealism today is admirable and I hope rubs off on your readers, young and old.

However, your stated beliefs may be misplaced under the current regulatory regime. We used to have a very strict regime and strong reputation until a dragon took over MAS and adopted a buyer's beware approach to regulation. He is now the pm and his prodigy the deputy pm and MAS head.

Until such time when an official pronouncement is made to the contrary, the current approach still stands.

Sorry to have to dampen your spirit this morning.

faber

Anonymous said...

faber, rb is almost always rather sarcastic in his posts. with rb, you have to read between the lines.

Chua Chin Leng aka redbean said...

haha. Please read my assumptions faber. I said I choose to be innocent and naive. And I agree with George Yeo that when things look too perfect, it is not real: )

Matilah_Singapura said...

redbean:

>> I also believe that the banking industry is in good hands, run by honourable men and women. <

I believe that the universe fair and just because it is run by a loving god.

Anonymous said...

Red bean, you got to be kidding me with this post!

Chua Chin Leng aka redbean said...

Believe me, I swear I am telling the truth, the whole truth, nothing but the truth ;)

Anonymous said...

RB, you forget to add that you also believe that pigs could fly

Anonymous said...

Bankers, property developers and gahmen are people that make this world more unequal.

Anonymous said...

Wah rb.
The standard of your article damn good.
You meet the requirements to be a NatCON discussion leader.

Chua Chin Leng aka redbean said...

Wow, with so many of you patting me on the back, I think I should consider standing for election and be a politician. I must be talking like a politician.

Anonymous said...

rb,

I did say today and this morning. Cheers.

faber

Anonymous said...

So long as USA remains the financial capital of the world, and the Federal Reserve remains the central banker of the USA, and politicians and bankers still sleep together, the day of banking industry being run by honourable men and women is just wishful thinking.

Oxy Moronopolistic said...

Show me an "honourable and ethical" (and successful) banker and I will show you an "honest and intelligent" (and successful) politician.