Transparency about the current market

I've often wondered, as I sit here on my train every morning writing a blog post or doing email, whether readers find my lack of comment on the current financial situation surprising. Obviously, there are few things more important at present than the happenings in the market, yet not once have I made any substantive statement on the matter. You'd think, since I am relatively outspoken on other matters, such as the business practice of analysts, or the various antics of vendors, that I might, at least, make some effort to offer critical insight or commentary from the perspective of a bank.

I thought it might be appropriate, at this point, to clarify the reasons why I've been reticent on this subject. Obviously I have my own very strong views, and Isometimes I sit on my hands when I read what else people say in the blogosphere on this subject in order to prevent myself throwing caution aside.

But those of you who work in banks will know how very difficult it is for an employee to be seen, and heard in public. My own bank allows me very great latitude in this regard. But I doubt that would continue if I added to the public debate on various subjects presently at the fore. We are presently not at the stage where unbridled comment on sensitive matters would be seen as a positive contribution to the debate, and I doubt very many bank employees anywhere are in such a position.

That's why you don't see much comment from the few bankers who have blogs and can be traced back to their institutions.

Now, there is nothing much wrong with this. As I've said before, we are on a social media journey, all of us in the financial services industry. The kinds of openness about corporate affairs pioneered by Robert Scoble at Microsoft might be an aspirational place to get to one day, but I can assure you we are a long way from that place right now. One can't change cultures overnight. Indeed, the traditionalists in banks would be horrified to discover anyone had such aspirations at all.

The key question is whether opening up a public debate via social media at this particular difficult time from the perspective of an insider – which I have no doubt at all would be lively, interesting, and good reading – would actually be worth the risk of putting social media in banks back years or not. My own view is that it is not.

This, of course, is frustrating. I don't like the fact that I can't share what I'd like. But I also know that there will be plenty of corporate-relations type things in the future to comment on, and I am patient. I am confident that caution now provides a solid platform for other more revealing posts in the future.

In the meantime, I am interested in the experiences of others. Colin Henderson, who writes BankWatch, used to be a banker and is a source of very critical insight into the current situation. Colin – would you have been so forward were you still with your former institution?

Over at Bank of America, the Future Banking blog has lots to say about the work of the innovators there, but I'm not seeing a great deal of commentary or analysis of our market conditions at present. Jeff and Co, do you feel, as I do, that its inadvisable for bankers to get into the public arena on these subjects right now if we want to keep blogging?

About the closest I've seen anyone associated with a bank come close to commentary on this stuff is Rob Findlay at NAB in his BankChannel blog. But even he is reserved? Any comments Rob?

I think, in the end, that banks will get to complete transparency in the medium term. The current crisis may even speed that along. But in the meantime, I'm quite certain that small, careful, baby steps towards that goal are much, much better than an all out race to the finish line.

Comments

[FredericBaud]

James,

I've never thought that Colin, Rob or yourself represented the official line of the institutions you work in (or used to work in in Colin's case). I believe that you present opinions that are only your own (as you state in your disclaimers) and that you should be free to do so.

In fact, financial institutions have been especially silentious and I don't think that this is good: they should show that they care about their industry. We will see if the Future of Banking, which is the closest thing to a real official position, will provide some elements to the debate and reverse the situation.

But in my view the current questions go beyond the industry boundaries to become a political debate. Then as a citizen, with a particular knowledge of some of the technical aspects of this industry, I believe it would make perfect sense that you express a personal position to help debating on the core of the matter.

Needless to say that this debate will be one of the topics we will be discussing during BarCampBankLondon2 next Saturday - http://barcamp.org/BarCampBankLondon2 - Maybe under the tagline I hope being catchy: "Fixing or Refounding Finance?"

[Aden Davies]

As usual an interesting post. As more and more conversations move online the longer banks stay out of those conversations (or prevent their employees getting involved) then the more they will become out of touch. Now is an especially sensitive times for banks but in some ways it is the ideal time to get involved. But as many in the industry may fear for their jobs then the likelihood of more people sticking their 'head above the parapet' is low. I agree it would be nice to have a banking Scoble (JamesGardnerizer? ;-) on the other side of the equation I would also like to see a banking Mini Microsoft (http://minimsft.blogspot.com/).

[Rob]

Thanks James for the comments.

I've run http://www.TheBankChannel.com for about 2 years now, and in that time NAB has known about it for about half of that time. And when they did find out, there was barely a shrug about the conflict here, as it was clearly me expressing my opinions and not that of the bank.

If however I said that I was making comments for NAB, Corp Comms would have used a fairly heavy hand and stopped me in my tracks, and fair enough in the current climate.

As I say in my disclaimer (I hate the fact that I need one, and James, I think I copied yours and altered it anyway) these are my ideas, given I work at NAB, but I'm happy to promote other banks new ideas and innovations if submitted to me.

I agree with James that the world does not need me, someone who is not a banker nor qualified to discuss things financial and economical, to speak on behalf of the learned folk in our bank (altho you see I attempt to comment on economic policy etc, more for my own development than as an authority). Cameron et al are the best to discuss this. But I too am patient, and think this sitiation will change.

I like the BofA blog, and the Wells/Wachovia blogs - they're excellent communication mechanisms that corporations under estimate and more particularly under resource. But in the end I really like good ideas, new ways of doing business, excellent customer experience, regardless of where it is. This is what I'll report on for now.

[James Gardner]

@Frederic: I too woudl love to be open and forthcoming about everything. Transparency is something that will be increasingly demanded of banks. But the real question is whether I would dare to talk about my work in a way that exposes new information that is noth otherwise available through ordinary sources.

[FredericBaud]

I believe that if the information is only shared between you and your employer, it is fair that you have a mutual agreement with your employer on what should be communicated - like info concerning details of a merger, even if Wells Fargo is showing us an interesting new approach.

If the information concerns a wider audience - like discussions on how banks should communicate or re-organize - I believe that you should feel free to expose publicly your opinion.

Transparency does not exclude privacy, it just brings more light to the grey areas some people considered a normal way of conducting business.

[Chris Skinner]

James, Rob and other bank bloggers,

I think if you're on the institutional side of the industry, you cannot say much right now without being in danger of being shot down.

If you did get into that argument online, as you say, your PR and Legal folks would be crawling all over it and would close you down anyway.

Net-net, you should be able to state the position of the banking perspective honestly and openly, as long as you can (a) take the backlash and (b) manage the internal firewall.

Both of the two latter are probably too much for most to handle.

Alternative?

Use folks like me and other non-bank bloggers to get the message out there, whether anonymous or identifiable.

Plus side: the message gets out.

Down side: you're trying to use social media for transparency and here's one part where you cannot without huge risks.

Finally, just as a little experiment, I thought I'd stick up for bankers today: http://thefinanser.co.uk/fsclub/2009/02/an-apology-to-98-of-bankers.html

It's hard to get the right balance between objective observation and subjective sadism.

Hopefully, some get that balance right.

Chris

[Warren Lewis]

James, Chris and others,

Great discussion. As an ex-banker, I understand the balancing act. As a provider/vendor/partner to the banking industry, I feel the need to be reserved in commenting for fear of angering some customers. It is a difficult time for all of us who care about this business of banking.

Warren

[FredericBaud]

I'm not sure I understand the reserve. Is there anyone in the banking industry who does not think that something very wrong happened?

It's not about taking all the blame. Banks are not responsible for the housing bubble. But there are certainly cultural attitudes that were not quite right and that worsened the situation. I believe that financial institutions should be open about their mistakes and ready to discuss how they can learn from them.

I don't think politicians and regulators should be left alone in defining the new rules. These should result from an open debate between them, the financial institutions and the citizens.

[James Gardner]

Warren: so nice to hear from you. I think it has been 2 years at least since I've seen you face to face. I can imagine how you feel the need for reserve: it is the same feeling I have too.

Chris: leaking things doesn't really accomplish anything, in my view, if the objective is to socialise social media so we can make a cultural change. I agree it gets the message out, but only the most courageous will ever use that means to do so. What I'd really like is for everyone to be able to write without fear of retribution. We are some way from that, I think.

Frederic: I agree with you, but reality is reality. I don't, for example, see you making substantive comments about the performance of your institution in public. How come?

[FredericBaud]

James, I'm not working in PR and never asked to. I feel entitled expressing my views as a citizen and raising my concern seeing the industry so silentious. During the different BarCampBanks, I believe we will be proposing alternative methods to re-invent finance. Hopefully this will contribute to the wider debate that politicians, financial institutions and the citizens should be having.

[Chris Skinner]

James

You misinterpret as I was not referencing 'leaking', but was talking more about influencing the people who can put forward your side of the fence so that there is proper balance.

That's nothing to do with 'leaking', which implies whistleblowers and such like.

Chris

[Jeff Carter]

James - it is a touchy situation to say the least. We are attempting to weave in some of this (just recently) and we'll see how it is received.

Great perspective from you.

-Jeff

[Colin Henderson]

Just getting to this now. My approach while working for a bank was different. The career realities and risks are very real, so lets not kid ourselves on that.

The risks are higher now, because even as recently as 2 years ago, blogs were not at all well known within banks, and frankly no-one at my bank knew about my blog aside from friends. I kept myself quite anonymous in those days.

[James Gardner]

Colin,

Thought that might be the case. I have been lucky to be not anonymous, but of course must watch every word. That is particularly true right now, as you say.

J