Bankers must take global protest movement seriously
by André Spicer
Only through dialogue with all sections of society can a more sustainable financial system be created
This week, thousands of bankers will stream by the hundreds of protestors - who are camped out on the steps of St Paul's Cathedral in the City of London. The bankers will probably not give these protestors a second thought. But they are making a grave mistake. If the banks are to find its way out of the current mire they find themselves in, they must listen to dissenting voices – no matter how challenging they might seem.
The protestors who have set up a temporary village in the centre of London are part of a global movement. Late last week, protestors set out to occupy the Wall Street stock exchange. Rapidly, thousands of people joined the protest. Donations were made. Tents were erected. A newspaper was printed. There was even a lecture series, which was hastily organised. The occupation provided a place for New Yorkers to share their anger and dismay about the continued and unfolding financial crisis. A speech to the occupation movement by the Slovenian Philosopher Slavoj Žižek seemed to catch a widely shared, but unspoken feeling: "They are saying we are all losers, but the true losers are down there on Wall Street. They were bailed out by billions of our money."
Inspired by the example of the Wall Street occupation, protestors have set up tents in more than 900 locations around the world. Support for these protests has come from some unlikely corners – including an editorial in Monday's edition of the Financial Times. The occupiers clearly share a deep rage about the ongoing inequities and carelessness of the global financial system. Although, what they share beyond this is less clear. The statements by the London occupiers are suitably vague. For instance they declare: "The current system is unsustainable. It is undemocratic and unjust. We need alternatives; this is where we work towards them." For some, this captures the woolly thinking of what they see as misled protests. But these broad demands are vital to mobilise a whole range of individuals, all with different agendas. It has helped to bring together religious groups, ecologists, anarchists, unionists and many people - who are simply disgruntled.
Now that the occupiers have set up shop, everyone is asking "what next?" The journalist Naomi Klein urged the protests in New York to continue the "hard work of building structures and institutions that are sturdy enough to weather the storms ahead". There has been much debate within the movement about what should be supported, what should be the next target and what principles to stand for. While the media spot light has been trained on the protests, very few people have stopped to ask what the financial institutions should do in response to these protests. It seems to be assumed that bankers will either just quietly ignore the occupation or treat it as an item of water cooler banter. But to do this would be to make a grave mistake. The concerns of the occupiers are not just the delusions of a handful few rebellious teenagers and professional activists. They express a feel of mounting anger and dismay about the global financial system - which is shared by pensioners, public sector workers, middle managers and even one or two outspoken plutocrats. Financial institutions ignore the occupations at their peril.
It is vital that the bankers and regulators seriously engage with the protestors. Listening to the protestors is an important way that banks could begin to bridge the global governance gap in the financial sector. Currently, there is a huge disparity between the reach and impact of the global financial sector and our ability to govern it. As the financial crisis continues to menace countries throughout the world, regulators desperately try pulling every economic lever they have at their disposal – often with little or no effect. One way the regulators could begin to come up with novel and, perhaps, more effective regulatory responses to the crisis is by engaging with civil society. Often, during times of crisis, civil society groups like non-governmental organisations play an important role in creating new kinds of regulatory solutions. Engaging with occupiers will also help financial institutions to address the serious crisis of legitimacy they face today. Public trust in the financial sector is at an all-time low. Public dismay might seem to be irrelevant to the global financial elite, but it is not. The central asset of any bank is not the assets on its balance sheet, but people's trust in the bank. Maintaining trust is not just about prudent investments and clever marketing. It also requires banks to show that they can really listen and respond to the demands of the wider public.
By taking the protestors seriously, financial institutions might also be able to solve the serious challenge of sustainability. During the last few years, we have seen even the most apparently rock-solid banks crumble into dust overnight. Often, this happened because bankers did not step back and think about the undue risks they were taking. In many ways, the protests are a wake-up call to the banks. The occupiers have many ideas about what a more sustainable financial system might look like. If financiers were able to take their eyes off their Bloomberg terminals for a few minutes, then they might come across some really novel ideas about what the shape of new economy, which will inevitably emerge out of the ashes of the present financial disaster. It is among the occupiers, not the traders, that many visions of new ways of doing business can be found. If banks show some willingness to engage with the protestors, then the protestors also have to be willing to repay the favour. The protestors do not seem to be clear about exactly how they would like the financial sector to be reformed. Nor do they understand many of the technical and pragmatic issues associated with reforming the financial sector. It is unlikely this dialogue would be easy. But it could be a step towards addressing some of the dangers that currently menace the global economic system.
André Spicer is professor of organisational behaviour at the Cass Business School, in London
Revolutions will, as always, have to start from below.
dontbuyit - Int''l