May 9 2018

According to David Kynaston’s history of the Bank of England (Till Time’s Last Stand), financial crises of one sort or another seem to occur at roughly 10-year intervals and, usually, in the autumn.  Oh dear!  Let’s hope then all the lessons of the last crisis have been properly learnt.  After all, as a famous financial journalist wrote: ““The great wish on the part of the English people as to currency and banking is to be safe.”  Well, quite – and as true now as when it was written – in 1844 by Walter Bagehot.

My take on the last 30 years or so of financial crises and how the sector is responding can be found here in May’s edition of FS Focus.  (My thanks to John Mongelard of the ICAEW and Chris Evans, the editor, and his team.)

The article can also be found here (on page 32).

Photo by rawpixel on Unsplash

March 7 2018

The banning of the Reverend Flowers – see here – is no surprise, though the reasons perhaps are.   His total unfitness for his role should perhaps have been as much of a consideration as his questionable moral compass and extra-curricular hobbies.  Still, it is a reminder that due diligence – real due diligence not the cursory box-ticking which it too often is – is essential before any hire.  A lesson the FCA might also have learned given its own less than glorious role in the sorry affair – see here.  Another inquiry into the Co-operative Bank is now on its way.  Will it tell us much more than the 2014 Kelly Review which concluded that “There was a pervasive lack of realism about the underlying strength of the business, partly arising out of a belief that as an ethical bank it was doing the right things…..”?  Paradoxically, a belief that you are a good person or good organisation can lead to a dangerous complacency.  It’s not what you call yourself that matters; it’s what you do.

And one of the most important things you can do is to hire the right people into an organisation.   As Warren Buffet put it – “You look for three qualities: integrity, intelligence and energy.  And if you don’t have the first, the other two will kill you.”