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The Old Lady of Threadneedle Street rejuvenated

I count myself lucky to have attended yesterday’s Bank of England Open Forum 2015 as the DRS delegate. In the Guildhall’s Grand Hall (with parallel events in Birmingham and Edinburgh), the Bank bravely convened a cross-section of the great and the good from both the City and Civil society for a wide-ranging series of discussions on the role of the financial markets and their regulation- brave because they also invited public debate and intervention. Far from the typical basement room public focus group, the Bank brought some big names, Mark Carney (twice), George Osborne and Mario Draghi, ensuring maximum coverage. Central banks have never been bywords for engagement and outreach, the Bank of England perhaps least of all. The question is why promote this (immaculately-organised) event and why now? A number of themes emerged from the keynote speeches and various “breakout panels”, my take of the message is:

  • Finance isn’t “God’s Work” but it’s a vital social function
  • The Bank recognises that the public has radically lost trust in the banking “profession” for good reasons
  • Trust should flow from finance being actually trustworthy
  • Transparency is the precondition for being “open”, a larger concept including dialogue and mutual respect
  • A lot of work has been done to remedy and prevent the pre-2008 problems in respect of both capitalisation and culture
  • That foundational work is now at an end. Mark Carney repeated that there will be no “Basel IV”
  • Regulators are now in a new “dialogue with stakeholders” phase to adjust and refine the rules that are now in the process of implementation. A process that will continue and adapt for the foreseeable futures

It would be easy to see the Forum as an excellently-choreographed PR exercise prompting the public to at least begin to imagine hugging a banker. While such a radical rehabilitation would doubtless be beneficial (if unnerving) to the City’s denizens, this does a disservice to the Bank’s intent. Rabbi Julia Neuberger, spoke at the introductory plenary session of the dangers of “groupthink”, when a socially-consequent subset become “hermetically sealed” within its own professional trajectory, one of the Forum’s recurrent themes- the Bank realises it needs to “reach out” to the public, in order to refresh and reorient its own thinking as much as theirs. If the Bank of England has embraced a new mission to educate, inform (and even entertain) the entirety of its “stakeholders”, yesterday’s Open Forum was a good start.

It does however note the next phase in financial regulation, while the focus remains on culture and conduct, the regulatory heavy-lifting has been done- the real work of implementation, refinement and the rebuilding of trust remains. The Bank is to be congratulated on its realisation and declaration that the finance industry operates by a form of social contract, which like all contracts requires consideration.

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