The Ethics of Reform

Rushworth Kidder's book ' The Ethics Recession: Reflections on the Moral Underpinnings of the Current Economic Crisis' suggests that what started as an economic recession has become an ethics recession - a collapse of integrity. The abandonment of responsibility and failures of moral courage underlying the financial numbers require us to think beyond personal ethics to a collective culture of integrity. Whereas the recession has typically been reported, discussed and analysed as a mechanistic failure in wealth creation, framed in the language of economics ('what's the bottom line') and politics ('where's the power'), Kidder argues we are increasingly needing to use another type of lingua franca - the language of ethics - to ask 'what's right'.

However, current UK media coverage of bank reform, following the long awaited report from the Independent Commission on Banking (Sir John Vickers et al), seems to have reverted to type, stopping short on the language of ethics, focussing on 'what's safe' instead of 'what's right'. Safety is needed for sure but reform presents an opportunity to stimulate consideration of banking for the 'common good'. Big Society is conspicuously absent. The separation of casino banking from the high street seems sensible but what about the 'financial well-being' of banking customers?

Bradley Fried of Grovepoint Capital recently published an article in the FT called 'Mandela's lessons in truth for City high-fliers' where he laments the lack of people with courage enough to ask 'what ought I do?' He feels that a rift has been opened between the City and the rest of society that we should all try to heal. "We need to do more than apportion blame and address structural solutions......What is now urgently needed is some moral authority from the government and also the financial sector."