Bishop Justin Welby, Archbishop of Canterbury contender, says battered financial services sector cannot be repaired

Cutting through all the sound and fury that has surrounded banks and the issue of financial reform since the beginning of the financial crisis, a leading contender to become the next Archbishop of Canterbury observed that too much effort is going into 'putting Humpty back together again' when most of the activity pursued by Humpty has no socially useful purpose.

As reported by the Telegraph,

The frontrunner to become the next Archbishop of Canterbury has accused banks of having “no socially useful purpose” and being “exponents of anarchy” in a speech warning that the battered financial services industry cannot be repaired. 

The Rt Rev Justin Welby, Bishop of Durham, says the sector must be rebuilt “from the ruins” of the financial crisis to become something that “helps people rather than being there for people to help it”. 

Bishop Welby, who is a member of the Parliamentary Commission on Banking Standards,... 

"But one principle seems to me to be clear, we cannot repair what was destroyed in 2008, we can only replace it with something that is dedicated to the support of human society, to the common good and to solidarity. 

"Financial services are crucial to human development, but they only do their job when the work they carry out is done in a way that is truly a service."...

"The task of all those involved in the supervision, the legislation for, and participation in the financial markets is to find that once in a generation leap of imagination that does not simply seek to repair what was destroyed in 2008, but to replace it with something that is of lasting value," he said in his speech. 

"Repair would be as inadequate a solution as beginning to put the stones of Coventry Cathedral back one on top of each other, to try and recreate what had been obliterated [during World War II]."

The foundation for replacing the sector with something that is of lasting value and making sure that banks truly provide a service is ultra transparency.

When banks are required to disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details, the sunlight provided by this disclosure can act as the best disinfectant for bad behavior.

Bishop Welby said "too much effort is going into putting Humpty back together again, and it can't happen". 

He said banks were "exponents of anarchy" before the financial crisis in 2008 because they pursued "activity without purpose". 

The Bishop explained: "Activity without purpose is anarchy. It may not look like anarchy, it may in fact be very well organised anarchy but unless it has a serious and clear purpose activity is merely random. 

"One of the biggest faults in the pre 2008 financial markets was essentially they were exponents of anarchy in this sense. They involved wild and frantic activity, often by exceptionally intelligent people, working very long hours, but they had no socially useful purpose. 

"The industry was referred to as financial services, but in fact it served nothing. 

"In the UK, where most of it was housed, SME's still struggled to find finance, although they were based within close reach of the largest financial centre in the world."