The conduct of bankers often raises suspicion among industry experts. The Telegraph reported that Allianz Global Chief Elizabeth Corley found that the financial services sector need to hold bankers more accountable for their actions so they start taking it seriously. In her address at the CityUK’s annual conference, this week, Corley told attendees that more intervention from the government and a robust culture of compliance is needed to stop bankers from behaving badly.
Corley says that there are blind spots between hedging risks and influencing market prices. In fast moving, intricate markets, it is sometimes difficult to root out bad behavior and too often it goes unnoticed. As recent cases involving financial institutions suggest, this type of behavior not only threatens the fiscal health of many banks, but it serves as a conduit for money laundering, bribery and corruption.
She compared unethical actions to driving where drivers feel tempted to go above the speed limit once there’s a clear road ahead. The concept applies to the financial sector, she says. Bankers tend to ease their way into wrongdoing, but companies need to immediately drop the axe on this type of behavior. The governance expert cites the recent Libor scandal as an example. Regulators slapped Deutsche Bank with the largest Libor fine in history and UBS was later accused of manipulation of the Libor benchmark—this type of misconduct may have started with little offences and eventually snowballed into a global corruption scandal.
As the head of the Fixed Income Market Standards Board (MSB) which was established by the Bank of England’s Fair and Effective Markets Review, Corley intends to help firms change the attitude of their bankers. The MSB plans on providing clear language that defines good and bad behavior that bankers can follow. Corley has initiated the process by surveying bank customers and brokers about their expectations of traders.