HSBC group chairman Douglas Flint said
focusing on behaviour and not regulation is the key on how the
accounting profession and the financial sector can most efficiently
deal with the aftermath of the financial crisis.
Flint made the comments during a speech,
Hindsight of a crisis: an opportunity to improve or
deceive, at the Institute of Chartered Accountants of Scotland
(ICAS) annual Aileen Beattie memorial lecture
yesterday.
He also said institutions are focusing on
developing complex rules which may lead to unintended breaches and
cannot foresee every single circumstance. The real challenge,
instead, is to introduce a widespread work ethic based on trust and
correct doing.
“Capital, liquidity and infrastructure
enhancement will also play a role as will better governance and
supervision but the greatest opportunity for improvement will come
from defining, teaching, reinforcing, rewarding and enforcing
values in terms of behaviour,” Flint said.
Flint stressed regulatory and public policy
bodies should concentrate on understanding and shaping the culture
of the financial system and care more about how individuals are
screened for behavioural characteristics, when recruited or
promoted.
“It is the aggregate of behaviour evidenced
within the system and in particular how it has changed that will
change society’s perception of banks rather than thousands of pages
of wordy new regulations designed to work in theory,” he
remarked.
Challenged by the 120 business-professionals
over the difficulties set about by globalisation when introducing
cross-boarder ethic standards, Flint said the solution is to train
people, not overcome the issue.
Aileen Beattie, to whom the speech was
dedicated, was executive director at ICAS where she worked for
almost 20 years. She died of cancer in 2005.
