I spent about 20 years of my career as a practicing chartered accountant, in he process advising many mainly small and medium sized businesses. Most felt they had two obstacles to achieving their goals (even if that belief ignored the fact that they themselves were usually the biggest problem in that process). The first was, largely unfairly, HM Revenue & Customs. The second, almost invariably justifiably, was their bank, and of the two the banks almost always came out top.
There was very good reason for that. Bank staff, who had joined them for the safest possible, lowest risk, highest pensioned career they could find in the hope of achieving the ultimate in security, sat and pretended they understood what it was like to run a small business. They hadn't a clue. Nor had they the slightest comprehension of the mind set that a person running a business needed to possess. And yet these bankers held the power to say yes or no. It's a recipe for disaster.
Give those bankers the wrong incentives and it will go wrong, as we have seen , all too often. There is a further claim about this today, with the FT noting:
Royal Bank of Scotland will on Monday face withering new claims over the way it treats business customers, including allegations that viable companies are being forced into default so the bank can seize their properties at knockdown rates.
More than once I saved companies facing such a fate - and when I say saved I mean just that. That RBS does it is no surprise; it's gone on for a long time. That's it's more commonplace now is also no surprise: attacking the more vulnerable customer as a means to quick profit is very tempting for any bank in need of easy money.
This is the scandal of banking, and not Paul Flowers.
The problem of the Flowers debacle is that there will be calls for banking to be left to bankers. And that really would be a disaster, because they have no comprehension of the real world. In the meantime we suffer for incompetence on all sides.
The question is, when will we realise that smaller, more accountable, local banks with a commitment to long term relationships are the answer? We seem a long way from that as yet.