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.

The SMRT Bus Drivers Affair

One has to sit out in prison, 4 or 5 were charged in court and 29 were deported. And there was a public outcry against the presence of these drivers and their unruly behavior, breaking our laws to go on strikes, and breaking our 26 years of industrial peace, without a strike.

Many of you may know the whole story, some know only parts of the story, some know nothing at all. For those who know the full story, know what was going, touch your heart and say, yes we have been fair, or unfair, to these workers.

For those who do not know, please go and read the whole affair, get the facts and then retake your position on this issue. You have the right to form any conclusion, as long as your heart is there, as long as you can touch your heart and say honestly to yourself, that you can sleep well.

In search of Excellence in mediocrity

There was a hush hush party in one of the top primary school. The students and parents were invited to a midnite celebration in the school compound. It had to be midnite to keep out of sight from the glare of the public. No one should know except for those connected. The principal and staff were quite apologetic for the stealth arrangement instead of grand party.

The school and the parents were celebrating the top student in the PSLE, out of sight so that no one would feel pressurized by the presence of the student. Attendance was by invitation only.

This is the new ethos of Sin City. Top achievers cannot be named. From now onwards, no one will know who is the top income earner in the City. No one will know who is the richest man. No one will know who owns the most properties. No one will know who wears the most hats. No one will know who is the biggest gambler.

The top student of the year will go around like he/she has committed something offensive or obscene, like a leper, to be hidden from the public eyes. What a shameful thing to do to a child who has done something so glorious and meritorious. Oops, shouldn’t have mentioned the word as it is linked to meritocracy, or is it meritocrazy?

There are several parents still bitching about this change in the media forum. Why don’t they let the sleeping dog alone. It’s water under the bridge. Now who is that poor girl or boy who scored so obscenely in the PSLE?

Olam too big to fail?

Olam is raising $1.25b in a bonds and warrants issue exercise to strengthen its liquidity position. Temasek Holdings, its major shareholder, has pledged to pick up all remaining bonds and warrants that are not taken up in a show of confidence or a show of faith. Muddy Waters is still holding on to its position that Olam is over stretched and is a risky bet. Several analysts and brokerage have also issued sell recommendations and MayBank has revised Olam’s value downwards to $1.42 from $1.75.

This Olam saga is becoming the biggest betting game for the moment with investors and analysts making guesses both ways. What is the real picture of Olam’s financial health is going to be of great interest as a bad call or a bad turn could make many investors win or lose big time.

Temasek is betting big this time round and it could mean many things. Is it a case of Olam being too big to fail and Temasek has no choice, being too deeply into Olam it has to boost up some support to protect its position? Or has Temasek done its homework thoroughly and betting a winning horse? Only time will tell as the parties on both sides of the bet are equally convinced of their positions.

Even with the financial data on the table, it is not easy to know the true picture of Olam’s financial standing or its viability as a business concern. It could end up a big win for Temasek or holding on to a big lemon. Is anyone wiser? This is supposed to be business analysis and not buying a gambling chip in the casino, but it seems that it is the case at the moment.

China must behave like a super power

China’s self restraint is becoming a joke to the little countries in Asean and they think they can make groundless claims against its territories, arrest Chinese fishing boats and fishermen and China cannot do anything about it. In the view of Asean countries, China is just a paper tiger. Just shout at China, call it a bully and China will quietly back off.

China needs to act like a big power like the Americans, the Israelis or the Japanese. It must be more willing to flex its muscles to hammer the little trouble makers coveting its territories. At the worst, it must act like the Indians as a regional power. In the Indian Ocean, no countries would dare to trifle with the Indians. It will lash out with whatever it got to any adventurers.

The Indians are moving into the South China Sea. It has declared that it is ready to protect its oil interests in South China, an open affront to China’s dispute with Vietnam. The Indian Navy Chief Admiral D K Joshi said that India is prepared to act, if necessary, to protect its maritime and economic interests in the region. This is as good as telling China that it will go to war with China. And no one is saying India is escalating tension in the South China Sea. That is how a big power should act and behave to keep the little countries out of its way.

At the moment, if China would to say such a thing, the little countries will scream that China is acting aggressively and the US will join in. China must get use to act like the Indians and soon the little countries will learn to accept it. And China must be prepared to slam them if they misbehave in order for them to behave well.

When asked if India is prepared for it (war with China), the Admiral said, ‘The short answer is yes.’ So what is China going to do about it now that India is stating its claim in the South China Sea?

China can respond by being meek and diplomatic and pretend it did not hear anything. China can react by sailing into the Indian Ocean and declare the same that it is there to protect its interests and is prepared for it.

Would China chicken out and be called an aggressor still, an aggressive power at the same time? Or would China just do it, behave like a super power and wield the stick to keep the hyenas away? Like it or not, it will always be called an aggressive power no matter how submissive it tries to be. It is time to kick asses. If China refuses to do so, it will invite more aggressive manoeuvres from the little countries with the Americans behind them. And India is joining the fray as the point man. More trouble and provocations will come China’s way.