Barclays new value statement: will it change the culture? No!

The Guardian reports on the new value statement that Barclays is rolling out across its organization and the simple question is:  will it change the bank's culture.  By itself, no.

Quite simply, talk is cheap and there are many banks that are quite content to talk the talk.

For example, Principle 1 for Goldman Sachs is that it puts customers first.  Did this stop Goldman from working with John Paulson and constructing the Abacus deal or putting together other CDOs?  No.

The only way that there will be cultural change in banks is if banks adopt ultra transparency and disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details.

When there is this level of sunshine into an organization, it acts as the best disinfectant for bad behavior.

For example, it eliminates the ability to manipulate benchmark interest rates like Libor because the rates can be based off of all or a subset of the actual unsecured interbank transactions that it engages in.

This level of disclosure also sets the standard for what the bankers see as appropriate for customers on products that the bank sells.  Bankers can be measured on and rewarded for creating transparent products for their customers.  At the same time, they can have their bonuses cut for creating and selling opaque products.

Antony Jenkins, who took over as chief executive at the end of August after the bank was rocked by an interest rate rigging scandal, said bonuses and performance would be assessed against a new "purpose and values" blueprint.... 

Jenkins, who took over after Bob Diamond stepped down in the wake of the Libor scandal, said he was putting five values at the heart of his plan: respect, integrity, service, excellence and stewardship....

"The behaviour which made those headlines in 2012 took place in the past. But it helped underline how banking as a whole had lost its way, and had lost touch with the values on which reputation and trust were built," he said in the memo.

Regular readers and the banking industry know that for banks, reputation and trust are built on providing ultra transparency.  As recently as the 1930s, ultra transparency was the sign of a bank that could stand on its own two feet and had nothing to hide.

"Over a period of almost 20 years, banking became too aggressive, too focused on the short term, too disconnected from the needs of our customers and clients, and wider society. We were not immune at Barclays from these mistakes." 

He said bankers pursued short-term profits at the expense of the values and reputation of the organisation, and in the coming weeks more than 1,000 staff would be trained to spread the new values and embed them throughout the bank. 

"Performance assessment will be based not just on what we deliver but on how we deliver it. We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values," he said.

So Mr. Jenkins, is Barclays going to announce that going forward it will provide ultra transparency?