Ethics lose out to thirst for profit

THE Irish Bank Officials’ Association (IBOA) pasting of the Irish banking sector on Thursday before the Oireachtas Joint Committee and the Public Service was not pretty if you were a top banking executive.

IBOA brings a unique perspective representing as it does over 20,000 bankers in Ireland and Britain.

Although careful not to damn the banks here to hell, it spared them nothing.

Despite several studies, including one by the Department of Finance in 2000, all of them missed the fundamental point, according to the IBOA general secretary Larry Broderick.

Mr Broderick spoke of the changing work practices and the obsession with making profits. He also slammed the decline in ethics.

It was a culture that made money its god and a culture driven from the top down.

As most customers know at this stage, the drive in Irish banking has been to keep face-to-face contact with customers to a minimum.

Not all of that is bad and few would criticise the growing use of cash machines

It seems paradoxical, however, that institutions who have possibly up to 90% of the population on their books have stood on their heads trying to avoid personal contact with them.

Much of that attitude has been driven by the prevailing profit culture. The decision to close branches in poorer areas is a cynical manifestation of that.

All this has resulted from a dominant culture emanating from the top down of profit before everything. Profit comes before service and the customer, before ethics and the highest standards, and before the welfare of staff, according to the IBOA.

Members of the Committee, including Joan Burton, again talked of AIB giving the “two fingers” to the Committee. They devoted quite some time to the issue of “compelability”.

Some members thought that AIB ought to be compelled to come before it after several refusals. And a one line reply from chairman Dermot Gleeson to their last request really got up their noses.

Arrogance? Either that or AIB is so up to its neck in these latest scandals that the new chairman is totally focused on sorting the entire mess out once and for all.

In the interests of balance, it would be wrong to point the accusing finger simply at the Irish banks.

What’s going on in the banks and what went on was cynical in the extreme. Hopefully the inquiries will go some way to responsibilities and them of their moral obligations not to blatantly rob their customers.

What Mr Broderick and the IBOA failed to point out is that a stock market-driven culture that lauds strong profits puts pressure on institutions to use the profit motive to the detriment of everything else.

That’s the reality of the Irish situation where we have taken the British and US systems as our inspiration. If you cross reference the kind of remuneration packages paid to those in banking or any other sector across Europe, they tend to be a lot more modest than those enjoyed by their English speaking counterparts.

The rush by Irish people to capitalise, as they thought, on the Eircom flotation, and the enormity of the DIRT scandal suggests that the profit culture is endemic in this society.

It’s about basic values and in that sense our predilection is towards winner takes all.

This fact is reflected in the type of governments we have been electing. This isn’t just about the banks, it’s about us, our values and priorities.