ICTU backs IBOA call for charter for fair banking

Issued : 7 July 2015

Delegates to the Irish Congress of Trade Unions Biennial Delegate Conference in Ennis, have voted unanimously to support a motion from IBOA The Finance Union calling ofr a charter for fair banking.

Moving the motion, IBOA  General Secretary, Larry Broderick, said:

"When the banking inquiry was established by the Oireachtas in Dublin, we ran a straw poll of our members’ views on our website.

"They expressed little confidence that an investigation so long after the event could produce a worthwhile outcome – especially when one of the key players, Anglo Irish Bank, was excluded from the scope of the inquiry for fear that comments made in the Oireachtas might prejudice the still unfinished legal proceedings against senior figures from that bank.

"Sadly, it seems our members’ already low expectations will not be exceeded.

"As each witness seeks to ensure that the finger of blame is pointed elsewhere,  the inquiry appears to have been caught up in minute details rather than exploring the bigger picture.

"And amid the countless agendas at play in this process, the most valuable lesson from the inquiry – developing guidance for future behaviour – is in danger of being overlooked.

"Even on the few occasions when the inquiry manages to get away from the melodrama of the “Nightmare on Merrion Street” to consider the bigger picture, the overriding impression from the key figures has been that, although they may have been in charge, they weren’t really responsible in the face of circumstances beyond their control.

"According to this narrative, it was bad luck rather than incompetence or recklessness that caused the crash while they were at the wheel.

"So these senior bank executives, politicians, regulators and speculators consider themselves to be the "victims of cruel circumstance" – though not, of course, so victimised as to lose their golden parachutes and pensions worth many multiples of the average industrial wage.

"While we can laugh at how absurd this claim of victimhood sounds, the really frightening aspect of this is that many senior banking executives still buy into this “bad luck” excuse. Frightening because believing their own hard luck story means they absolve themselves of any responsibility to change their behaviour.

"For some being rescued by the State means that they can act with impunity – so why change? Meanwhile for others, the drive to repay the State’s investment can be used to justify the same old behaviour taken to new extremes – like overcharging customers, underpaying employees and cutting services to reduce overheads.

"So my members have seen the pressure that developed during the 'boom illusion' continue unabated – with heavy emphasis on meeting sales targets rather than meeting customer needs.

"When you see your customers as revenue streams rather than human beings, it becomes acceptable to reduce branch networks or to impose an effective surcharge on lending rates in order to rebuild your balance sheets even while your customers struggle with austerity.

"But, of course, it’s hard to treat your customers with respect, if you’re not prepared to treat your employees with respect as well. Employees are increasingly seen as a business expense to be reduced along with other overheads – rather than as a resource of expertise and experience to be deployed to enhance customer service.

"For many bank bosses electronic banking is a particular godsend – except, of course, when RBS’s IT infrastructure – fragile from decades of underinvestment – highlights the folly of putting all your eggs in the electronic basket.

"But although banks attempt to justify branch closures with claims about the convenience of mobile and internet banking for customers, I have yet to meet one bank customer who is happy that the local branch has been closed.   Yet instead of being a complementary facility, electronic banking is increasingly being offered as an alternative to face-to-face banking in order to reduce overheads still further.

"Though changing bank culture from within may be difficult, it could be given a push from outside if Government had the will to do so.

"The current situation where the State in Ireland and Britain has considerable influence, both as regulator and as amajor shareholder, in a number of financial institutions, offers a major opportunity to change the culture of banking – with the overwhelming support of the general public.

"However, according to Government, it doesn’t interfere in the day-to-day running of banks (though our members in AIB and Bank of Ireland would find that hard to believe).

"But even it was true, being opposed to micromanaging individual banks should not prevent Government from establishing ground-rules for the sector as a whole. Our motion is a starting point for these ground-rules – based on the principle of respect…  for customers, employees and communities.

"This principle of respect also encompasses a measure of transparency to avoid controversies like those about recent asset disposals undertaken by IBRC in the Republic or NAMA in Northern Ireland – two publicly-owned entities whose activities have been shrouded in secrecy.

"In  last weekend’s Sunday Independent, Gene Kerrigan complained that the body politic in Ireland has suffered from a poverty of expectations. Perhaps in light of the latest events in Greece, we might begin to raise our expectations of those in authority..

"This motion aims to start the conversation as far as banking is concerned. As customers, as employees and as communities, we expect more: we expect better."


The full text of the motion is below:

Motion on a Charter for Fair Banking

Mindful of the unprecedented changes that have taken place in the banking sector since 2008 – which have not only included the major convulsions associated with the widespread restructuring of key institutions but also the substantial transformation in the delivery of services to customers;

Recognising that the cumulative impact of these developments on workers in the banking sector has been far-reaching – in terms of job losses and reduced living standards while customers have generally experienced higher charges for lower levels of service;

Considering that after six years of largely negative annual results, the major financial institutions on the island of Ireland have recovered to the extent that they have all recently returned  – or are about to return – to profitability;

Noting the report of the Northern Ireland Affairs Committee of the House of Commons at Westminster into recent developments in banking in Northern Ireland; and

Conscious that an inquiry into the banking crisis is currently being conducted by a special committee of the Oireachtas in the Republic;

This Biennial Delegate Conference of the Irish Congress of Trade Unions believes that the principle of respect is at the core of fair banking: respect for customers or clients, respect for employees and respect for communities. Accordingly, Congress resolves to adopt the following principles as the basis for a charter for fair banking which it will promote through all appropriate media and fora with a view to securing its adoption by all banks operating on the island of Ireland:

  1. The principle of respect treats customers fairly by prioritising the provision of individual service over the attainment of sales targets and by offering value for money in all financial products and services.
  2. The principle of respect treats employees fairly by encouraging their full participation in the key decisions which affect their working lives on the basis of an ongoing process of comprehensive negotiation with their trade union representatives.
  3. The principle of respect treats communities fairly by upholding equitable employment policies and practices, contributing to balanced economic and social development and working to protect the environment.
  4. The principle of respect ensures that the governance and regulation of the banking sector is undertaken in the public interest based on the highest ethical standards backed by appropriate resources to ensure compliance.
  5. The principle of respect ensures that remuneration policies within the banking sector reward prudential business practice and penalise excessive risk-taking.
  6. The principle of respect ensures that social diversity informs all aspects of banking operations – including the acquisition of customers; the recruitment, retention and promotion of employees; and the governance of these institutions.
  7. The principle of respect requires that, in all aspects of their business, banks honour both the spirit and the letter of legal measures to secure the timely payment of all taxes, levies and other charges due to the State.
  8. The principle of respect values the promotion of long-term sustainability over short-term profiteering in the investment policies of all banking institutions
  9. The principle of respect underpins a positive approach to economic policy whose overriding aim is to focus on building constructively for the future rather than exploiting temporary difficulties in pursuit of narrow institutional interests.
  10. The principle of respect encourages variety in the ownership models in banking – including the formation of a State-funded institution designed to contribute to the long-term development of the economy – as distinct from providing temporary respite for distressed banks destined to be returned to the private sector.