Lloyds backs HSBC against red tape choking bankers
LLOYDS’ chief executive joined the flood of bankers speaking out against the damaging effects of over-regulation, yesterday warning that red tape risked squeezing the life of much of the industry.
Antonio Horta Osorio warned that reversing the burden of proof when a problem arose – treating bankers as guilty until they can prove themselves innocent – could stop staff taking any of the risks which were crucial to basic banking services.
“I worry that this could incentivise people to do nothing, as they could waste their time trying to create a paper trail rather than doing what they should be doing, focusing on customers,” he said in an interview with Sky News.
“Under the proposed rules we will run the risk that people spend their time avoiding accountability as they fear being prejudged as guilty when they get something wrong. We want to make sure that bankers, like any other profession, operate to the highest standards but we have to be fair in how we judge them.”
Horta Osorio was speaking just two days after HSBC’s chairman Douglas Flint warned staff are starting to avoid taking the basic risks on which banking depends.
Flint said the “growing danger of disproportionate risk-aversion” was creeping in “as individuals, facing uncertainty as to what may be criticised with hindsight and perceiving a zero tolerance of error, seek to protect themselves from future censure.”
And the British Bankers’ Association has been pushing the government and regulators to row back on some rules which it fears are having serious unintended consequences – for instance, forcing Western banks to pull out of some emerging markets.