International Bank Bashing

Time to take my ‘bank bashing’ global……to the US shores no less.

 

The fallout from the banking collapse of 2008 / 2009 troubles me more and more as time passes. The financial and banking sectors have the worst memories of all and some of the current practices leave me at best bemused and at worst damn right angry. Clearly lessons have not been learnt.

 

Let me give a few examples of evidence that concerns me:

 

Wells Fargo

A US bank that is the most valuable bank in the world. Recent practices saw employees open more than 1.5 million fake bank accounts as they tried to hit sales targets. The bank took no action until the scandal became public……when they then sacked 5,300 staff. Alarmingly, not one of those sacked was a senior executive or manager. It took pressure from Senator Elizabeth Warren that some higher level sackings actually took place.

 

Prudential Financial

Another US juggernaut of a financial services company who have a corporate handholding arrangement with Wells Fargo (who sell Prudential Financial products). Prudential Financial decided to review sales practices of their products by Wells Fargo given the story above. You can guess the rest……less than desirable sales practices and another bout of sackings.

 

You don’t have to be Einstein to know that banking continues to be more than a little bit broken.

 

Here’s the thing……due to the integrated nature of banks across the world who are all so intertwined with each other, it is literally a domino effect when one fails and falls. Just look at what Northern Rock did in 2008 / 2009……the domino fell and it took others with it.

 

Creating fake bank accounts doesn’t bring the banking system down. Taking huge risks to meet sales targets does.

 

Until the banking sector uses the same moral compass as the rest of the world, we will always be looking over our shoulder for the next banking collapse.

 

I really hope I’m wrong.