Bashing bankers has been popular throughout time. Public trust in bankers has probably never reached lofty heights and confidence in the west’s largest banks has, I believe, barely recovered from the debacles of the financial crisis, a decade ago.

There have been times when the culture that dominated many major banks was set by the tone at the top by men who had been deeply influenced by the Great Depression and World War Two. I had the privilege to know a number of them quite well and to work alongside a few of them. They were bankers who did make mistakes, but ones of banking judgment, not values.


What that generation of banking leaders all had in common was a profound sense that they had an abiding responsibility, as individuals, but also as leaders of major institutions, to serve the public interest.

The late Alden W. "Tom" Clausen, for example, left Bank of America, which he ran in the ‘70s – then the US’s largest bank – to become president of the World Bank because of an intense passion to work to reduce poverty in the world’s developing nations. He hired me and together we traveled to many countries where he constantly encouraged leaders to advance their poverty alleviation programmes.

Today, the absolutely dominant priority in the major banks, which shaped their culture, is the maximisation of short-term profits. It may lead executives in these banks to engage at times in dirty deals, including promoting subprime home mortgages and associated securities. The banks have paid record fines, but evidence of contrition there has been none.
The short-term profit maximisation and high executive bonus culture is not solely driven by the bankers. Recent decades have seen the emergence of non-bank financial institutions, notably private equity firms and hedge funds, that in some cases have placed enormous pressures on the banks to act to boost their share prices.

The leaders of major banks must urgently find their moral compasses, because they have an obligation to all of us to do so. The biggest banks headquartered in Western countries have balance sheets larger than the GDP of nations.

The staggering scale and power of these big banks obligates them to operate not only in the interests of their shareholders, but also in the public interest. It is high time that they did so.

Frank Vogl is the chairman of the Partnership for Transparency Fund