TTF's Strategy for Driving Change

The Transparency Task Force is an informal but increasingly influential forum that operates in a collaborative, collegiate and consensus-building way; focusing on solutions not blame.

 

To help solve the many problems that exist in the finance industry we seek to drive the change that the damaged reputation of the sector so desperately needs and poorly served consumers so desperately deserve.

 

Our primary strategy for driving change is to bring together two types of people:

 

#1, Those with a sense of ‘passion & purpose’ about what needs to change, such as:

 

  • The thought-leaders that speak at our many Transparency Symposium events
  • The ethically-minded financial services professionals, enlightened market participants and leading academics who are involved with our 12 teams of volunteers
  • The TTF volunteers that work together to produce important Consultation responses and challenging White Papers
  • The many subject-matter experts who publish their progressive thinking in our online monthly magazine, the Transparency Times
  • The leaders of the many campaign and advocacy groups that are closely-aligned to the TTF's overall objectives to create a finance industry that serves its markets as it should - efficiently, ethically, honourably and transparently

 

#2, Those with the ‘power & position’ to make change happen, such as:

  • Government officials, for example:
    • The UK's Members of Parliament and their equivalent around the world
    • The Lords in the UK's Upper House; and their equivalent around the world
    • Members of various All Party Parliamentary Groups and their equivalent around the World
    • Senior Civil Servants at The Department for Work & Pensions; and at The Department for Business, Energy and Industrial Strategy; and their equivalent around the world
  • Financial Regulators, such as:
    • The UK's financial regulators, particularly The Financial Conduct Authority, The Pensions Regulator, The Prudential Regulatory Authority, The Competition & Markets Authority, The Financial Reporting Council and The Payment Systems Regulator
    • The USA's financial regulators, particularly The Securities & Exchange Commission, The Commodity Futures Trading Commission, The Federal Reserve System, The Federal Deposit Insurance Corporation, The Financial Crimes Enforcement Network, The Financial Industry Regulatory Authority and The Office of the Comptroller of the Currency
    • Mainland Europe's numerous financial regulators, particularly The European Central Bank, The European Banking Authority, The European Securities and Markets Authority, The European Insurance and Occupational Pensions Authority, The European Systemic Risk Board, The Financial Market Authority, The Financial Services and Markets Authority, Netherlands' Authority for the Financial Markets; The Swiss Financial Market Supervisory Authority plus the numerous national Central Banks
    • Canada's financial regulators particularly The Canada Deposit Insurance Corporation, The Office of the Superintendent of Financial Institutions, The Canadian Securities Administrators, The Investment Industry Regulatory Organization of The Mutual Fund Dealers Association
    • Australia's financial regulators, particularly The Australian Prudential Regulation Authority, The Australian Securities and Investments Commission
    • South Africa's financial regulators including the South African Reserve Bank, The National Credit Regulator and The Financial Services Board
    • The many and varied financial regulators in the Far East, particularly The Hong Kong Monetary Authority, The Hong Kong Securities and Futures Commission, The Monetary Authority of Singapore, Japan's Financial Services Agency and The Securities and Exchange Surveillance Commission
    • Other financial regulators around the world 

 

Based on what has been happening in the UK in recent years, our strategy for driving change seems to be working well and we are looking to become a positive influence internationally because 'opportunistic opacity and obfuscation' in financial services is a global problem.  

 

That's a very important point because financial services markets and many of the most influential organisations are global, so there is no point in trying to fix the problems one country at a time. 

 

Regulatory arbitrage would just move 'opportunistic opacity and obfuscation' and malfeasance to 'the path of least resistance', so a global approach is what's needed. 

 

That's why we are making such a huge effort to globalise our community as quickly as possible. 

The Great Divide

You can read the speech by  Andrew G. Haldane, FAcSS (the Bank of England's Chief Economist and Executive Director of Monetary Analysis and Statistics) that he gave on 18th May 2016 at the New City Agenda Annual dinner.

 

The speech is entitled The Great Divide and it is a first class explanation of why the trust deficit really matters and why it makes sense to try to do something about it.

 

Please click on the green button to access it; if you're not convinced of its relevance to our initiative, here's part of it:

 

..."The most important and compelling message the Bank received at the Open Forum came in the first session. The Bank had conducted some polling of perceptions of the financial sector – for example, by asking people what one word best described the future of financial markets. Among the Bank’s usual contacts, including those in the financial sector, the most used word was “regulated”. Many of us will have heard that message from financial insiders concerned about the perils of over-zealous regulators.

 

For me, the more revealing responses came from the general public, from the customers, rather than the producers, of financial services. The word most used by them when describing financial markets was a rather different one: it was “corrupt”. Not far behind were words like “manipulated”, “self-serving”, “destructive” and “greedy”. I am sure many of you have heard those messages too. They are certainly ones I have encountered frequently on my visits around the country."...

 

Please click the green button  below to access the full speech. If you need to read another piece first, here it is:

 

..."At least until recently many economists like me, when faced with this evidence, might have shrugged our shoulders. Social capital had no real role in our models of economic growth, unlike physical capital and human capital. Trust did not butter our parsnips and nor did it enter our production functions.

 

Recently, however, that orthodoxy has changed and the importance of trust has become clearer.

 

Evidence has emerged, both micro and macro, to suggest trust may play a crucial role in value creation. At the micro level, there is now ample evidence the degree of trust or social capital within a company contributes positively to its value creation capacity. 

 

At the macro level, there is now a strong body of evidence, looking across a large range of countries and over long periods of time, that high levels of trust and co-operation are associated with higher economic growth.

 

Put differently, a lack of trust jeopardises one of finance’s key societal functions – higher growth.

 

Those social capital effects appear to be particularly potent when it comes to financial decisions. Evidence suggests that a lack of trust leads people to retreat from the stock market and banks and to move towards cash holdings and informal sources of credit, such as payday lenders and loan sharks. That jeopardises the second key benefit of finance to society – improved risk-sharing by households and companies.

 

So a lack of trust in finance potentially hobbles both economic growth and financial stability.

 

That lack of trust is the mirror-image of the perception gap between the financial sector and wider society, the Great Divide.

 

The Great Divide matters because it signals a pronounced and protracted erosion of social capital. It puts finance on notice for losing its social licence. And, unaddressed, that jeopardises future wealth and well-being."...

 

Please click on the green button to access the full speech. If you're not yet convinced you should, here's a final snippet:

 

..." As a survey in 2013 of financial professionals found, rather remarkably, that over half believed their competitors engaged in illegal or unethical behaviour.  A smaller, but still high, fraction of 24% believed their own company engaged in such practices. Similar percentages believed their industry did not fulfil its fiduciary function of putting clients’ interests first.

The significance of these findings is not the precise percentages, as striking as these are.

 

More fundamentally, it is because of what they reveal about finance’s perception of itself, the mirror it holds to the social identity of finance."...

 

Click onto the button below to access the full speech; you'll be glad you did, it's profoundly thought-provoking for anybody interested in the future of the financial services industry:

If you are not already on the right page and want to read about our major international project to help rebuild trustworthiness and confidence in financial services, click on the orange button below:

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