Let’s emancipate ourselves from financial slavery

August 7th, 2012

By Paul Moore

Ian Fraser’s introduction: Paul Moore, the ‘HBOS whistleblower’, has launched a new organisation, the New Wilberforce Alliance, which aims to free the world from the modern-day slavery caused by the financialisation of our culture that took root in the 1980s. Here, Moore explains how the recent revelations of rampant immorality and criminality in the banking and financial sector are galvanising change

Less than two years ago Marcus Agius, who resigned as Barclays chairman on July 2, was the lead signatory to a letter in the Financial Times. In the letter (Financial leaders pledge excellence and integrity) Agius and 16 other leaders of the UK banking and financial sector committed themselves to fostering a culture based on professionalism and integrity. Their letter, dated September 29, 2010, followed several private meetings organised by the Archbishop of Westminster with top financial sector people to discuss whether there had been a “moral dimension” to the banking crisis.

I was involved in helping to brief the archbishop’s advisers in relation to these meetings, and was hoping that they might lead to real change.

When Agius sent the letter, we now know that Barclays was already being investigated by the Financial Services Authority (FSA), US regulators and other law-enforcement agencies for deliberately fixing Libor (the London Interbank Offered Rate).

Along with the Bank of England base rate, Libor is probably the most important interest rate used in the market by banks and other lenders to determine what rate of interest they should charge their own customers but also underpins a $500 trillion market in derivatives. But Agius did not come clean about the matter. The clear inference from the time it took to become public  is that he, and Barclays’ then chief executive Bob Diamond, who has also now been forced out, were leading their bank in an expensive and disputed investigation with the FSA, no doubt using all the clever lawyering power at their disposal.

In a similar vein last November, when Diamond must have known that Barclays was on the verge of being formally disciplined by the FSA for Libor fixing, he delivered the inaugural BBC Today lecture, in which he stressed the crucial importance of rebuilding the trust he said had been decimated by events of the past three years. He declared that bankers must place the interests of their customers “at the very heart of every decision we make”.

The difference between what Agius and Diamond said then and what has now happened is almost unbelievable.

Of course, the Barclays affair is not the only nasty news emerging from the banking sector at the moment. Among the many scandals there is interest rate swap mis-selling to small and medium enterprises (SMEs). There’s HBOS and Farepak. There’s money laundering by HSBC and Standard Chartered. So what should be done about the banks and financial sector giants? We clearly haven’t got anywhere near the bottom of things or anywhere near fixing them yet.

Although I believe there are important secu­lar solutions that will address these problems, I am also sure that none of them will work without a fundamental moral and ethical transformation of society.

As I stated last month in evidence to the Treasury Select Committee in relation to its new inquiry into “corporate governance and remuneration in systemically important financial institutions”, the whole banking system is broken and needs total reform. As we have still not carried out a thorough, rigorous and transparent investigation into the causes and implications of the banking crisis, we have built our reform agenda on sand. The only way to get to the bottom of things and establish what needs to be done to fix the broken system is to carry out a thorough, forensic and transparent judicial investigation. Preferably, we need a Royal Commission.

We must change the fiduciary duties of directors of large and publicly quoted companies to include public duties, so that they are legally obliged not to focus solely on destructive yardsticks like short-term profit and share-price maximisation. The current fiduciary duties do not adequately reflect the societal importance and impact of such large organisations.

Many global companies now have balance sheets larger than those of sovereign governments. Current fiduciary duties permit (or even require) directors to focus almost all their attention on short-term profit because of the demands of the investment analysts to deliver more and more growth in shorter and shorter time frames.

Driven by this short-termism, chief executives and their management teams really have no choice other than to push the boundaries of risk-taking to achieve short-term financial goals. And, to hit their targets, executives frequently feel the need to sail close to the wind, break the law and ignore ethics.

We also need to:-

  • overhaul of corporate governance, including the introduction of a formal, non-executive role accountable for oversight, assurance and ethics.
  • ensure non-executive directors and both competent and independent.
  • establish a register of connections and contacts between non-executives and the companies and directors they oversee.
  • ban FTSE 250 companies from sitting as non-­executives on other FTSE 250 companies.
  • strengthen whistleblower ­protections, especially for those in charge of risk, compliance and internal audit
  • proscribe proprietary trading as a banking activity.
  • cut excessive pay.

But these, and many of the other solutions that I set out to the Treasury Select Committee, are only a part of what has to change. We also need to change the “me, more, now” culture  that continues to be promulgated by leaders in politics, business and the media.

I feel energised and believe that the banking crisis and the ongoing revelations of wrongdoing and corruption in the UK and global banking sector are strengthening our chances of creating a new popular movement for recovery, renewal, reconciliation, reformation and renaissance. There are countless organisations on the same journey, and millions and millions of ordinary people. We need to work together to provide leadership and join them together around one common agenda.

William Wilberforce (1759-1833, pictured left) was one of the world’s greatest social and moral activists. He worked tirelessly for the abolition of physical slavery and many other causes at the heart of Christian social justice. In the spirit of Wilberforce, I and a few others have launched the New Wilberforce Alliance, whose objective is to mobilise a mass, peaceful, non-violent movement of people and organisations to work “to free the world from the slavery of greed, with its addiction to excessive growth and consumption for the few and the consequential human misery and environmental destruction which that inequality causes for the many”

There is a lot to do; we are up against virtually the entire establishment of vested interest. Perhaps Agius and Diamond, and other recent departees from Barclays, might want to consider becoming founder members?

In the end, whatever they have done, we must forgive them, because we know that they, like most people in banking, are good and honest, but have just been caught up in a system that has encouraged them to do things that they are know, in their hearts, were wrong. Let’s work together to change our society for good. Let’s connect with millions, share our ­experience, strength and hope and build a better world – together.

For further information on the New Wilberforce Alliance, visit www.newwilberforce.co.ukPaul Moore was in head of group regulatory risk at HBOS until December 2004. His evidence to the Treasury Select Committee in February 2009 led to the resignation of his former boss, Sir James Crosby, as deputy chairman of the FSA (See ‘Bling’ Crosby’s Day of Reckoning). Moore is now an adviser on risk, governance, regulation and ethics. A version of the article was published in The Tablet on July 7, 2012. Follow Paul Moore on twitter

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3 Comments for “Let’s emancipate ourselves from financial slavery”

  1. A bold initiative from a brave man with a huge uphill struggle on his hands! I wish him the best of luck. I note there is now a website here: http://www.newwilberforce.co.uk/

  2. Very encouraging to hear Paul Moore’s Wilberforce Alliance has a mission statement which calls for reform of the attitude which crippled the global economy. For those who have been on the receiving end of banking fraud it could provide the first light at the end of the very long dark tunnel. I can only applaud the dedication this must have taken to achieve this crucial first step and hope the Willerforce Alliance drums up the support of more people who wish to singfrom the “ethical” hymn sheet.


  3. Just for the record:

    This was written in 2009, just 6 months after the collapse of the Icelandic banks, when depositors in the Manx arm of Kaupthing had yet to see any return of their deposits. In the event, things are turning out far better than anyone could have expected back then, with 91% now distributed to all unsecured creditors. But it has taken 4 years to get there, during which thousands of ordinary depositors suffered immense stress and financial difficulties from which some will never fully recover. In 2005, the FSA allowed Kaupthing into the UK (and thus effectively into the Isle of Man) by agreeing to the take-over of Singer & Friedlander in the face of serious reservations expressed by several of its senior executives.

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