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20 December 2013updated 11 Sep 2021 9:46am

We should look at the Quakers who founded Barclays for an example of banking with values

The Archbishop of Canterbury is right to urge professional standards among bankers. The industry requires social, as well as regulatory capital, in order to recover some esteem.

By Richard Spencer

I always feel a little uncomfortable when priests speak about the need for Christian values in business. This isn’t because I feel there is no place for values in the world of commerce, nor that I am especially hostile to Christians (I know some really good ones) but rather that I think they shouldn’t be exclusively Christian. Why shouldn’t they be Muslim or Hindu or Buddhist or Jewish or humanist values? Or maybe just values? So I squirmed a bit when the Archbishop of Canterbury raised this in his speech on bank reform and the financial crisis to the Bible Society where he spoke of the need for professional standards among bankers.

On reflection it seems quite appropriate for the Archbishop to say this as it reflects the views of Christ, who seemed to have a particular dislike for money-lenders and cleared them from the Temple. Maybe my discomfort is because the words always seem a little smug, as though the Church has the right answer rather than approaching the issue more humbly with a question. But, good for him for saying something.

The point is, values matter. However, I think we could look to another Christian group for a more practical example of what this could mean.

When giving evidence on the Libor rate-fixing scandal to the Treasury Select Committee Bob Diamond was asked by John Mann if he knew the founding principles of the Quakers who first set up Barclays. He didn’t. Funny that. (They are honesty, integrity and plain dealing). Quakers became involved in banking because local merchants and traders trusted them to look after their money. Quakers see no separation between religious and public life: one lived both by the same rules. Poor business practice – including looking after someone else’s money badly – could get one expelled from the Meeting, the unit of Quaker community. This operated, I would say, as a form of regulation.

The 20th and early 21st century narrative around business has seen the triumph of the market in all aspects of life, and the crowding out of social norms by market ones. This has driven a wedge between business and society, creating a false distinction and permitting business to act in its own self-referential interest.

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There has been a “de-valuation” of business expunging the need for values-led decision-making, reducing everything to a numbers-based market-priced business case. How common is it today to hear people betray, in their conversation, a divide between their work and home personas, one of which is value-laden – the other devoid of ethics. The sentence usually runs along the lines of “as a parent I understand … however I can’t see how that applies at work”. And so this is carried over from a distinction often not so much between business and society but business and values. And to go slightly further here: I don’t think the issues are about long and short-term decision-making but about values-based decisions that create long-term value.

Banks prospered because they built trust. This is what we call social capital and that trust has largely evaporated today in no small part because we now treat the law, rather than behaviour, as the defining point. If your acts aren’t against the law then they are acceptable, seems to be the assumption. But are they? Is there a simple binary decision to be made that if actions are enshrined in law, they are appropriate? Does that mean you are somehow not responsible for exercising your own judgement?

Of course not. There is often a gap between what the law says (and let’s face it, the law is not black and white) and what is the right thing to do. In that gap we have to use our judgement and take responsibility for doing so. And isn’t it our values that guide this judgement?

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I’ve said in a previous piece for the New Statesman that in the context of the financial crisis, we (society) have been singularly reluctant and slow to identify individuals who should be held to account, conveniently blaming the system instead. In other words they didn’t break the law and so they aren’t accountable. This has to be nonsense. People may not have broken the law but society – and especially one that has just bailed out what can only be described as a failed system – has expectations of the financiers and traders that reach beyond the law.

This is the concept of a profession and while this concept is highly wrought in some areas – the medical, legal and accounting professions, which have codes of ethics and conduct and oversight – the banking community only has the notion of a profession, which seems to be all benefit and no cost to them.

If we accept that there is a role for the professions then isn’t it time the banking profession professionalised as the Archbishop of Canterbury suggests, and gained some values?  Shouldn’t we be able to bank on those values – by this I mean, rather than hearing about how the banks need to increase their regulatory capital, isn’t it time that we noted the other important factors in maintaining the system and pump in some social capital as well?

I have been very lucky to be part of a project that has become a movement – the Finance Innovation Lab – and my friends and colleagues there have, amongst many other amazing initiatives, developed one called Transforming Finance. It has a true and inspiring vision of what a good banking system might look like and a charter you might want to sign up to. Most exciting of all there is also a documentary, which I recommend to you.