Cleaning the money

Tweet It seems that not a week goes past without the exposure of another scandal by one or other of the banks.  Over the last week, it was HSBC’s turn to come under the spotlight.  I suppose it was inevitable that Labour politicians in London would go for the personal angle and start attacking Tory minister Lord Green.  He certainly has some questions to answer, and they need to be asked; but Labour’s tactics also succeed in diverting attention from the substance.  It’s become more about who did it than about what was done.

But the what deserves more attention.  The accusations are twofold, in essence.

Firstly, it is suggested that the bank went out of its way to find ways around trade embargos and sanctions in order to continue to make profit from certain regimes, notably Iran.  And secondly, that the bank engaged in money-laundering on a massive scale, assisting various drug barons and gangsters to turn dirty money into clean and untraceable money, even if only by turning a blind eye or having weak systems rather than through active collusion.

In reality, how different, in moral terms, are the bankers from the gangsters and drug barons whose money they have been laundering?  They’re all trying to make money for themselves at the expense of others.  What’s the moral difference between simply ignoring the rules and laws on the one hand and trying to find ways of subverting them on the other?

What some of the various e-mails and statements seem to be suggesting is that the bank wanted to be seen to be abiding by the letter of the rules, without allowing the rules to actually achieve their purpose – and that it was doing that in pursuit of profit.  The pursuit of profit, in short, outweighed any moral responsibility to assist the relevant authorities in achieving their clearly-stated aims.

That subjugation of morality to the pursuit of profit is something of a common factor in a number of the recent scandals, and equally common is the defence that what was done was ‘within the rules’.  From duck houses to money-laundering, the defence is the same one.  It raises the question as to whether, and to what extent, we can or should expect companies or individuals to follow any moral imperatives at all.  Or is life really just about following the rules, and not expecting anyone to make any wider judgements?

There’s a problem either way.  The problem with leaving the rules lax and expecting people to exercise a degree of morality is that there isn’t an agreed definition of what is or is not moral.  What, precisely, is the standard of morality to which we wish them to adhere?  And how do we set it?

On the other hand, ever tighter rules merely encourage people to believe that moral behaviour is anything which is permitted within the rules, and that if something isn’t specifically prohibited, then it’s OK.

On top of that, there is of course the knowledge that ‘if we don’t do it someone else will’, and competition of that sort drives people to push the rules to the limit.  In that sense, the whole of our banking system is a bit like a gigantic game of ‘Prisoners’ Dilemma’, with everyone trying to second-guess what everyone else is going to do.

Expecting those whose primary goal is to make money for themselves or their employers at the expense of others to do any more than abide by whatever rules we set for them is probably unrealistic.  If we want to change the way people behave, we need first to change their perception of what it is that they are trying to achieve.  Pursuit of personal advantage simply doesn’t do it.