As followers of the Conduct Costs Project will know, that project publishes a regular table that shows the conduct costs track record of 10 major international banks (soon to be expanded). The most recent table is set out below.
The Financial Conduct Authority does not publish a comparable table in relation to the fines it has levied on banks. Instead, it publishes a regularly updated list of the fines, listed one by one, shown in calendar order, with no aggregation where the same institution is fined more than once. No comparison with previous years, or amongst banks is offered. The Financial Ombudsman Service publishes comparable information about consumer complaints ("complaints data"), but showing the institutions in question in alphabetical order. In response to the "FAQ" "which financial businesses are top and bottom of the complaints table?" The FOS states, in effect, "work it out for yourself" (or, to be precise, "You can look for yourself on our website to see which businesses had most or least complaints.....Don't forget that larger businesses may get more complaints because of their size"). Fortunately for the public, the mass media invariably converts the information offered by the FOS into a league table. It would be ludicrous for any reporter covering the latest data not to do this. (Can you imagine the conversation with his editor if he offered a piece that just showed the banks in alphabetical order?).
The Banking Standards Review, which says it is keen on metrics and benchmarking for measuring bank behaviour and related matters, does not like league tables either. It says (without any further explanation) that they can be "gamed". An example or two would have been helpful. We don't think our table is, or could be "gamed" ....unless, for some reason the public sources from which the data are derived are themselves gamed. If we did a simple "mini-table" based on the FCA fines of the major UK banks in the last two years it would look like the table set out below.
This is no more than a direct "crib" from the FCA's own website. But it shows the information in a more graphic and helpful way, enabling banks to be compared with each other and years to be compared with each other at a glance. Track records of banks' disciplinary and conduct costs matters are important, not just for the banks and regulators, but for the public in general. Remember, the banks say, at regular intervals, that they want to get back our trust. If the FCA thinks it appropriate to slap a heavy fine on Barclays because it finds the fact of five "previous convictions" a matter that "aggravates" its latest offence (see Final Notice of 23rd September 2014 at para. 6.38) then the track record is of equal interest to those whose trust Barclays says it is seeking. For the public, it is not good enough for the details to be buried in a Final Notice. Most of them will not read it and will only be alerted to this aspect of the case if the mass media report it. And, given that even the Financial Times skipped over the "previous" point pretty lightly, the chances of the tabloids or the TV channels saying much about it are negligible. (It is perhaps unfair to single out Barclays. They are not the only repeat offender but they offer the most recent example of the problem caused by unnecessary obscurity).
There is also an inconsistency in the regulators' approach. They insist on multiple, unbelievably explicit warnings about risks attached to investments, couched in language that even a child could understand. But when it comes to the disciplinary track records of those who have custody of our money, the attitude is: it's on the website if you care to look for it; work it out for yourself.
I guess we can all understand why banks don't exactly welcome the provision of more accessible information to the public about their lamentable disciplinary records. (Although one hopes they have it to hand for their internal management and risk control). However, such attachment to secrecy hardly justifies the regulators not trying a bit harder to be more helpful. And, for the more enlightened banks, what first looks like a threat should perhaps be seen as a challenge that they are not afraid to take on. The price of seeking greater trust involves better disclosure of factors affecting the risks imposed on those whose trust you seek. We are familiar with the trust rhetoric. Time now to see some action that shows a genuine change of heart.
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