dumb insolence (dʌm ˈɪnsələns)
- a silent act designed to frustrate a complainer, criticizer, superior etc perhaps involving a refusal to answer them, looking sideways or at other people as they chastise you or ignoring them by continuing what you are doing.
- (military, British) the offence of refusing to answer questions by a superior officer about a breach of discipline
So what’s garrulous insolence, then? It’s a coinage of my own; in fact, it is almost the same thing as dumb insolence, except noisier, and easier to confuse with sheer cluelessness. Its objective is not so much to infuriate, though it certainly does that, as to exhaust, and thus, defy, a questioner, by sheer wind power. Its insolence inheres in its deceptiveness, and in its barely-implicit assumption that the best use of the questioner’s time is to waste it.
I suppose Monty Python’s Dead Parrot sketch is the locus classicus, but the UK’s Parliamentary Commission on Banking Standards seems to be a good source of examples too. Here, for instance, are extracts from the uncorrected transcripts of the testimony of Simon Thompson and Anthony Browne, who recently appeared before the Commission.
Simon Thompson’s testimony first: he is Chief Executive of the Chartered Banker Institute, who “develop and promote professional standards for bankers and provide world class professional qualifications for the financial services industry in the UK and overseas” and “are unique in being entitled to award the “Chartered Banker” designation to our qualified members”.
Fred Goodwin, whose name features repeatedly in the testimony, is of course the great bogeyman of the British leg of the Great Financial Crisis: the wrecker of Royal Bank of Scotland, briefly (ahem) the largest bank in the world, by assets. We British are right to take pride in Goodwin, our homegrown benchmark of megalomaniac bungling. Our bankers can still surpass Dick Fuld or Jimmy Cayne for recklessness, and match Chuck Prince or Stan O’Neal. Oh dear me, yes.
From the transcripts:
Q2381 Chair: Good afternoon. Thank you for coming to give evidence this afternoon. May I begin with a question to you, Mr Thompson? Fred Goodwin, I gather, is a member of the chartered institute. Should he be?
Simon Thompson: He is a member of the chartered institute. He was made a fellow in the mid-1990s. One of the great issues for professional bodies in banking is that we have no statutory or regulatory powers, and we find it very hard to investigate conduct issues. We can investigate issues of student misconduct, and members phone in to talk about CPD.
Q2382 Chair: What do you not know in this case that you might need to know in order to say, “Would you mind moving on?”
Simon Thompson: It is a very simple thing. We need to know that a regulator has imposed sanctions on him. As far as I am aware, he is regulated by at least two bodies, neither of which has imposed sanctions.
Q2383 Chair: So as far as you are concerned, unless a regulator has been given a red card, anyone can be a member of your institute?
Simon Thompson: Not any longer. The criteria for joining have been tightened up very considerably since I joined the institute five years ago.
Q2384 Chair: Have you met and discussed whether you can remove those whom most people would consider unsuitable? Have you discussed the Goodwin case?
Simon Thompson: We have discussed the case at council and we have agreed that all members, however unpopular, should be subject to the same criteria for membership. We are not a statutory regulator; we have no investigatory powers of our own.
Q2385 Chair: But you have your own constitution. You can vary the constitution and make rules that would enable you to remove Fred Goodwin.
Simon Thompson: Our rules say that when a regulator imposes censure or sanctions on an individual, we will remove them. I would stress that he has been investigated by the FSA. He is on the FSA register and he is on the register of an accounting body, and neither body has seen fit to sanction him.
Q2386 Chair: You could give yourself a general power to act on unsuitability. You could do it next week.
Simon Thompson: I am not sure. Without being a statutory regulator with the quasi-judicial processes that the FSA, the accounting bodies or the General Medical Council have, we do not have those powers; it is within the power of Parliament or regulators to give those powers to professional bodies.
Q2387 Chair: I am not asking you to strike him off. It is the job of others to decide whether he is on the approved persons regime for the purposes of doing a job in banking. I am asking you, given that you are a banking institute, whether you think that you should have taken action to deal with Fred Goodwin and similar cases.
Simon Thompson: I wish we had the powers to be able to investigate the matter properly.
Q2388 Chair: You run your own constitution.
Simon Thompson: But we do not have any powers to investigate and compel evidence. That requires some sort of statutory underpinning.
Q2389 Chair: But you run your own rules. In a sense, it is like a club. Why have you not exercised those rules?
Simon Thompson: I think professional bodies in banking need to be much more than a club, and we need either to be able to rely on the work of independent regulators to look at this or to have some form of independent powers to compel evidence. Any individual, however unpopular, surely has the right to a fair hearing, conducted in accordance with general quasi-judicial principles, and we are not in a position to do that at the moment.
Q2390 Chair: You are a private body-correct?
Simon Thompson: We are a private body-an educational charity, in fact.
Q2391 Chair: A private body can make its own rules, so you can meet tomorrow to make a rule to give the board or a group the right to say, “We’d really rather not have you as a member.” The MCC can manage that; why can’t the banking institute?
Simon Thompson: We have rules which say that when an individual is found by a regulator-
Q2392 Chair: You’ve told us what the rules are. I’m asking you why you haven’t changed them already to enable you to take action.
Simon Thompson: Because we feel that the rules we have at the moment, which state that-well, I won’t repeat them, because you are aware of them. We feel that those rules are appropriate for a professional body that does not have investigatory and disciplinary powers of its own. We-
Q2393 Chair: Okay, so you think that the current rules you’ve got, which enable Fred Goodwin to remain a member, are satisfactory.
Simon Thompson: I think the current rules that we have need to be enhanced by a much greater independent regulator that looks at these cases, can take action against individuals and strike people off-
Q2394 Chair: But they are satisfactory, aren’t they? In your view, they are satisfactory.
Simon Thompson: I think our rules have put us in an uncomfortable situation.
Q2395 Chair: So they are not satisfactory.
Simon Thompson: I think without some form of statutory underpinning or much greater co-operation with a regulator, we are not able to take the action against individuals that we might wish to.
Q2396 Chair: It’s extraordinary. Every other private institution out there doesn’t sit around waiting to find out whether Parliament is going to legislate to help it to decide who is suitable to be a member.
Simon Thompson: I’m not sure I entirely agree with that, if I may-
Chair: It’s what you are suggesting.
Simon Thompson: After all, he is a qualified chartered accountant and a member of an accounting body with much greater investigatory and disciplinary powers than our own and he remains on the register.
Q2397 Chair: So he is a suitable person to be a member of the chartered institute, in your view. Is that what you’re saying? Is he suitable to be a member of the chartered institute?
Simon Thompson: My view is that-
Q2398 Chair: Try to answer the question, because the question is fairly straightforward. It is either a yes or a no, really, that one.
Simon Thompson: It is straightforward. I would like us to have the powers to take action against any individual, including Mr Goodwin, who would have breached our code of conduct.
Q2399 Chair: Given what we have just heard for the last five or six minutes, why do you think that the chartered institute can make much of a contribution in the field of improving banking standards?
OK so that attempt at a spot of positioning looks pretty forlorn. The committee continues to pick away at the Fred Goodwin thing…
Q2428 Chair: Mr Thompson, I have an extract from your code of conduct in front of me, and it says that members have a duty to “Uphold the name…of…the banking profession”. That is what it actually says. Do you think Fred Goodwin has upheld the name of the banking profession?
Simon Thompson: I don’t know is the answer. That is why I would like to have the powers to investigate him and find out.
Q2429 Chair: Don’t you think you are just about the only man left in the country who does not know?
Simon Thompson: I think there are many men and women in the country-
Q2430 Chair: He might have been maligned?
Simon Thompson: Who have been horrified by what has happened in banking more broadly over the past few years. If we are to take action against an individual, it has to be done, surely, on the basis that that individual has a fair hearing, however unpopular they may be.
Q2431 Chair: You can set up your own hearing on the basis of your own code of conduct, just like any private body. That is going on as we speak-all the time, all over the country-in private institutions.
Simon Thompson: The issue here is one of evidence.
Q2432 Chair: You can ask for the evidence. What power do you not have to run yourselves that you feel you need?
Simon Thompson: We do not have the power to compel an individual, an organisation or another body to provide evidence that an individual has acted badly.
Q2433 Chair: Have you asked Fred Goodwin? You are saying, “We haven’t got any powers to compel,” but have you tried a letter, for example, or even a phone call?
Simon Thompson: We have not asked him to supply evidence, because a disciplinary committee has not been established to look into that. We are waiting for regulators, who have the power to do these things, to take action. That is not a satisfactory situation, and it illustrates why current professional bodies in banking cannot take action against these individuals, although we have regulators who could and should.
Q2434 Chair: Do you appreciate that what we are watching this afternoon gives us powerful evidence to suggest that your body is not the one best suited to play a role in restoring standards?
Simon Thompson: Not surprisingly, I take a different view. We have a high-profile individual who is extraordinarily unpopular, and we are being pressured into taking action against them.
Q2435 Chair: I am using him only as an example. As several colleagues have pointed out, there are many others around.
Simon Thompson: In one or two cases where high-profile individuals have been members of the institute, disciplinary action has been instituted, and those individuals are no longer members of the professional body-where a regulator has taken action. [Interruption.] If I may finish the point, Mr Chairman, we are in an uncomfortable situation, but there are bodies with more powers than ours, who have regulatory powers, who have investigated and who have not taken action. We are in an impossible position, where, without having the powers, we are being asked to take action against an individual, when others have not acted. You might wish to ask them why other censures and sanctions have not been forthcoming.
Q2436 Chair: Just at the moment, we are asking you. I am sure you understand.
Simon Thompson: I know. I am well aware of that.
Q2437 Mark Garnier: Sorry to bleat on about this, Mr Thompson, but would you not agree that the tone from the top is vital if we are to improve standards?
Simon Thompson: The role of senior management and the tone from the top in creating the right culture are absolutely key. There is also a wider point: the tone at the top is the key driver in making sure that organisations take professional standards seriously and that there are not policies and procedures that prevent individuals from doing that. There is also something about the tone at the middle and the tone at the bottom. You need to have individuals surrounded by a culture of professionalism.
Q2438 Mark Garnier: Given the last half an hour’s conversation, in which we have talked about the tone the Chartered Banker Institute is setting regarding Fred Goodwin, do you think you are setting the right tone from the top, or are you merely saying that you want to wriggle like [an] eel to avoid any responsibility in terms of people who have brought banking into disrepute?
Simon Thompson: I think we are setting the appropriate tone from the top by-
Q2439 Mark Garnier: By not throwing Fred Goodwin out of the organisation.
Simon Thompson: I think we are succeeding in setting the right tone from the top by getting nine banks to agree to a common code of professional conduct for the first time, so that professional standards-
Q2440 Mark Garnier: But it does not matter, because they will not be thrown out if they get it wrong, will they?
Simon Thompson: Well, I come back to the point-my colleagues made this point-that we are not regulators.
Q2441 Mark Garnier: You do not have to be regulators. I am sorry, but you have gone on about this a great deal, and this is where we are getting frustrated. If you are a member of a golf club, any other sort of club, a political party or anything else, there is always something in the rules that says that a member must uphold the good name of whatever organisation they are a member of-this is merely an internal thing. If you genuinely think that Fred Goodwin has upheld the good name of the Chartered Banker Institute in the actions that he has taken, that sends an extraordinary message. Surely, your organisation could just hoof him out because he has brought the banking industry-and your organisation as a result, I might add-into disrepute.
Simon Thompson: There are many organisations of which he has fellowships, memberships and so on, and is a qualified member of, and I think we are all in the same position. We believe-I cannot speak for anyone else, but I suspect most organisations would say-that any individual, however unpopular, deserves a fair hearing. Unfortunately in banking, as non-regulatory and non-statutory bodies we do not have the quasi-judicial mechanisms we need in this day and age to conduct a fair hearing.
Q2442 Mark Garnier: You have a constitution, like any other organisation. If somebody breaches your constitution, surely you can just turn round and at least telephone to say, “Given the acres and acres of bad press about you for the last seven years, would you mind coming in and having a conversation about the fact that you’ve blown up the entire banking system of this country?” Surely that is not a bad conversation to have, is it?
Simon Thompson: I’m not sure that is the way we want professional regulators to work in this country, that they just look at the newspapers, see someone is unpopular and then decide to do something.
Q2443 Chair: We are not asking you to act like a professional regulator; we are asking you to act like a private club. His golf club has got rid of him. His golf club has managed it and you have not.
On to Anthony Browne, the new CEO of the British Banking Association, which, until September 2012, oversaw the calculation of LIBOR, and collected fees for it. Readers will be aware that the BBA’s LIBOR oversight didn’t amount to very much.
Q2520 Chair: Before bringing in Andy Love, I want to be clear what you mean by a bad banker. You said earlier that a bad banker was somebody who had broken the law, but it is much more than that.
Anthony Browne: That is one example. It is a clear example that we can all agree on.
Q2521 Chair: Yes, but you would agree that someone who mis-sold products on a vast scale was a bad banker.
Anthony Browne: The broader point that I was trying to make is that I think that the industry should take the moral high ground on the behaviour of bankers, and should not defend behaviour that is unacceptable and is seen to be unacceptable. As I said, we are not a regulator and we do not regulate individuals, but people who break the approved persons regime and get prohibited and so on should be chucked out.
Q2522Chair: So we are clear that people are bad bankers if they are no longer considered fit and proper to be an approved person? We are agreed about that?
Anthony Browne: Yes, I think I agree on that as well.
Q2523Chair: And we are agreed, aren’t we, about people who mis-sold products on a vast scale?
Anthony Browne: Yes, if they have broken the regulatory regime.
Q2524Chair: Well, what does that mean? When you say you want higher standards, this is exactly the point that I am on. Are you relying on the approved persons regime to tell you that, or are you saying that there is a standard beyond that?
Anthony Browne: We want to raise standards across the industry for everybody.
Q2525 Chair: I am asking you if someone has mis-sold products on a vast scale-
Anthony Browne: You are talking about-
Chair: Someone who has been out there selling PPI to hundreds of people knowing that they do not need it.
Anthony Browne: One of the things we have suggested in the options that we sent you about standards is an industry-wide code of conduct that the banks-you could have a banking standards board or a banking standards review council-would oversee and ensure that the code of conduct was properly implemented. One of the options is that if bank employees are deemed to have broken the code of conduct, they should, as part of their employment contract, lose their job. Another example-
Q2526 Chair: That will be enough as an example. As long as we are in the same place, we can move on. I want to make sure that we are clearly in the same place. Somebody who has mis-sold products on a vast scale will have done that.
Anthony Browne: They should have done, yes. We do not have a code of conduct. We have not precisely defined it. Clearly part of it should be looking after the interests of customers.
Q2527 Chair: It would do in future, given where you want to take your code.
Anthony Browne: Yes, absolutely. Mis-selling is completely unacceptable and there is no defence for mis-selling. You should not encourage practices that encourage mis-selling.
Q2528 Chair: I just want to be clear what is meant by the phrase “bad banker” when you use it. I just want to give one more example, then by all means add a lot more. Take someone who has, for example, made colossal misjudgments that cost the taxpayer billions of pounds. Would you think that that is an example of a bad banker?
Anthony Browne: There is a very interesting question here-the Government have obviously got a consultation on the duties of possible criminal sanctions against directors of banks-about what constitutes recklessness and negligence. You have to think very carefully before you criminalise making a bad business decision, if that is the route that you are going down.
Q2529 Chair: Again, you have gone all the way back to where we started this conversation about three minutes ago. We began three minutes ago by saying how a bad banker is not just somebody who has become a criminal and broken the law. It means more than that, doesn’t it, and you gave what felt to me like a helpful answer, which was, “Yes, and it means a lot more.” So then I tried to explore what “a lot more” might entail and we arrived at somebody who has made a colossal misjudgment and thrown away billions of taxpayers’ money, and you seem unsure whether that person is a bad banker. He is clearly not a good banker, so he is likely to be a bad banker.
Anthony Browne: No; the point I was trying to make is that running businesses, small and large-particularly small ones-is very difficult. It is difficult to predict the future and to know what circumstances you are going to find yourself in. Good people make bad business decisions. That is the point I want to make. You can make the worst possible business decision. To talk about a completely different industry-
Chair: I agree. It is a fair point.
Anthony Browne: Bill Gates missed the internet and Nokia missed smartphones. Nokia’s share price collapsed.
Chair: We all agree.
Anthony Browne: Does that make the head of Nokia a bad person?
Q2530 Chair: We all agree and you are making a fair point, but a particular duty of care is required where a firm benefits from an implicit guarantee.
Anthony Browne: Well, that is the point that I was trying to make.
Q2531 Chair: On the Nokia example you gave, or the Vodafone example, they do not have a state guarantee standing behind them, do they?
Anthony Browne: No.
Q2532 Chair: So it is different. Therefore a bad banker is likely to be somebody who triggers on a vast scale a state guarantee, unless there is a incredibly good reason why it happened.
Anthony Browne: If they are acting recklessly, yes, I would agree with you, but just making a bad business judgment-
Q2533 Chair: Do you think Fred Goodwin was a bad banker?
Anthony Browne: It’s difficult to say-
Q2534 Chair: Do you think he was a good banker?
Anthony Browne: With the benefit of hindsight, he clearly took-
Q2535 Chair: If I may say so, your hesitancy over questions like that is not the best place to be.
I should point out that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings. I fear, however, that any corrections will make little difference to the woeful impression made by this pair of slippery nonentities, blinking in the bright lights. But at least, after that brisk slap, Mr Browne snaps out of it, and starts being “helpful”, the highest praise this committee ever offers. For Mr Thompson, there appears to be no redemption.
When I get around to it, I’ll provide more sightings of “garrulous insolence” at the TSC, from grander members, and ex-members, of the British banking firmament,: there is quite a back catalogue to work through, and it’s still growing.
One hopes that this magnificent Punch and Judy show eventually leads somewhere, for banking in the UK. One is glumly aware that it may not.