Standard Chartered's new ethics crusade shows how much banking has left to do to clean up its act. The emerging markets lender is clamping down after discovering some employees' personal financial dealings violated its conduct policies. In response, it fired several bankers in Dubai, is expanding its internal investigations team, and has clarified the rules.
Some bankers said Standard Chartered's policies were ambiguous. Chief executive Bill Winters and his management team are trying to dispel any such haziness with a series of memos to staff, bearing the hashtag #knowtherules. This can't harm. But in one missive, Winters also highlighted a sense of entitlement in the industry, a person who read the memo told Reuters Breakingviews. Neither high pay nor the lessons of the global financial crisis are preventing some bankers pursuing bigger gains. This sort of behaviour has also shown up elsewhere in the industry. Former Deutsche Bank investment banking co-chief Colin Fan led a group of bankers who invested their own money alongside a client in a 2009 deal.
Such personal investments can sometimes technically comply with internal rules. But they give the unhappy impression that well-paid financiers with access to market-sensitive information are putting their own interests before those of their employer and clients. Ambiguity should be shunned rather than exploited by those working in an industry whose reputation is already in tatters.
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It's good news that Standard Chartered, like other banks, is finally bringing its supposed Masters of the Universe back down to earth. Yet re-entry is taking a depressingly long time for the industry as a whole.
