Can the finance sector restore its reputation?

Not if you believe Steve Cummins, Chief Executive of TheCityUK, the body focussing on promoting and developing the UK finance sector who spoke at the UKSIF Annual Lecture last week.

In presenting the case for maintaining the UK's role as a key centre for sustainable and responsible finance, he made a particularly interesting claim that once you have lost public trust and confidence you cannot recover or restore the same trust and confidence. Instead you have to find a new basis on which to gain fresh trust and confidence.

If that is true, it means that the path to the rehabilitation of the finance sector needs to be a new one. One, perhaps, in which financial firms position themselves as the eyes and ears of investors looking for, and dealing with, forthcoming problems in the marketplace: protecting the interests of all rather than simply seeking to avoid disaster themselves (with mixed success) and trying to stay one step ahead of the regulators.

That would mean seriously addressing issues like climate change and biodiversity and ways in which globalisation could fail to benefit everyone, each of which themes contain the seeds of mass value destruction for the world's investors if not properly addressed.

It might also involve asking what culture and leadership is appropriate for a finance sector playing its part in long term sustainable wealth creation for the benefit of society as a whole.
All of this adds up the kind of new approach that might indeed generate fresh public esteem for the finance sector and all who work in it.

And while may all of this may sound like something of a challenge the significance of Steve Cumming’s remark is that anything less than a radical break with the past might simply not do the trick in rebuilding trust and confidence.

So if TheCityUK is willing to set out on such a radical new approach it will be down to its backers (who include many of the big names in UK finance) to rise to the challenge and to make good use of all that UKSIF and others can bring to that journey.

A transcript of Steve Cummins speech is available here

- Peter Webster