The Lost Art of Banking

A Genealogical Analysis of the Banking Crisis and Bank Rehabilitation

Aisling Tuite

• Publisher: Palgrave Pivot
• Year: 2019
• ISBN:
  9783030121990
• Topic: Business
• Subtopic: Financial Services
• Index: Business

This Palgrave Pivot explores the recent financial crisis from a new perspective. Reflecting on 40 years of banking experiences, the book will open new avenues to understanding banking and comment on possible ways to rehabilitate banking organisations.

In 1965the Bank of Ireland received a consultancy report from McKinsey & Company, which heralded a new phase in banking practice and organisation. In the years that followed, the Bank of Ireland opened up its once traditional culture to outside influences changing the way work was done and workers were viewed. Direct competition was introduced alongside specialisation of roles, and hence college education was identified as the way to meet demands of the market and bankers began to develop a full suite of products to keep customers loyal. The once professional bank manager who was a guardian of good practice eventually became absorbed into the needs of the leviathan organisation. The end result is an unimaginable and interlinked financial crisis in 2008 that swept across Ireland and the globe.

This book explores banking organisation and practice as it transforms and across the period from 1960 to 2018. It argues that organisational goals over individual responsibility paved the pathway towards crisis. Organisationally, anxiety and fear of failure took the place of certainty and stability. While the financial crisis is coming to an end, banking organisations remains fragile and prone to influences that may lead them towards a path of continuous cycles of boom and bust. Such a state has the potential to create an unending cycle of boom and bust and the end of stability and the institution of banking. This book shines a light on that and will be of interest to banking and finance researchers, students, and practitioners.

© The Author(s) 2019

Aisling TuiteThe Lost Art of BankingPalgrave Macmillan Studies in Banking and Financial Institutionshttps://doi.org/10.1007/978-3-030-12199-0_1

Begin Abstract

1. Introduction

Aisling Tuite¹

(1)

Waterford Institute of Technology, Waterford, Ireland

Aisling Tuite

Email: [email protected]

Abstract

This chapter introduces the book by questioning the identity of the contemporary banker. Returning to the beginning of the research period of the 1960s–2000s, this chapter explores the many social and economic changes in Ireland and globally that have influenced the changing nature of work. Drawing on the theoretical explorations that are used later in the book, a brief overview is provided on how the world of bank work has become transformed and how this has influenced the culture that is now present in banking.

Keywords

Global financial crisisBank workersOrganisation storytellingGenealogyHistorical developmentsFuture developments

End Abstract

The ‘Modern’ Banker?

When the ‘Anglo tapes’¹ were released to the public in 2013 not only did they add to the ever-increasing outrage aimed at the banking industry but they gave us a brief glimpse inside an often closed-off world. The emotions, the language, the hubris and the lack of regard for regulators from former CEO of Anglo Irish Bank (Anglo) David Drumm and his colleagues are revealed through these taped and leaked telephone conversations which also reveal the atmosphere as the bank grasps at any measure to keep afloat in the looming global financial crisis (GFC). The conversations on these tapes are laced with profanities and slang, language that transcends the archetypal banker that many imagined were still, in this modern globalised world, caretakers of their money and economic stability. In the following years the Irish Government would nationalise and wind down Anglo Irish Bank while investing €60 billion² to keep the banking industry afloat and to stabilise the economy. The ‘Anglo tapes’ are not just indicative of the level of arrogance and hubris that surrounded the upper echelons of banking,³ they provide a rich insight into the changing language of banking. Gone is the performance of the banker as an upright, well-spoken, smartly dressed protector of our financial well-being. These tapes are one of the rare glimpses that we, the general public, get behind the granite columns of the banking industry. It is not just the language that is a cause for concern; a more disturbing feeling that arises from listening to these tapes is that of the future shape of the industry; what form will this culture, which is on the cusp of taking over this industry and its organisations, take.

Fig. 1.1

Bank of Ireland, College Green, Dublin

The essence of the full conversation on these tapes is the self-assured confidence that the Central Bank of Ireland and the financial regulator had no option but to give the unprecedented financial support that Anglo needed to stay afloat. The risk and fear of a bank collapse is so great in a small and overstretched economy that no bank will be allowed to fail. The balance of power between banks, their regulators, national economies and governments has never been more visible. It is for this reason that a conversation needs to be had about the future of banking and what type of characteristics of bank and banker are needed to ensure a stable and sustainable future for banks. Searching for the lost art of banking is one way of doing this. When I allude to the ‘art’ of banking I do so with acknowledgement that it could also be conceived as a craft, a performance, an occupation, a profession or a vocation. Many of these elements are present throughout the narratives of life inside a pillar bank and form the backbone of the overarching discussion in this book.

The Draw of Banking Organisations

The global financial crisis was impossible to ignore. Just a few years into the GFC I began to seek out debates in the public realm that were arguing for better and more robust systems of banking that would prevent or limit this type of globally interconnected crash reoccurring. Three or four years after the many crises and recessions that hit global economies it appeared that most public discussions were either focused on fire-fighting or trying to decide who was to blame. There were very few balanced arguments aimed at analysing the shady practices, mistakes or errors of judgement and finding ways to move forward and create a stronger and more reliable banking industry. Unfortunately, as Joris Luyendijk⁴ noted, while the often myopic public and political discourse got stuck on a circular track, the banks moved on and continued to develop with few changes to their business models or cultures.

When I began to study banks I was not interested in their role in the GFC; there was too much focus on this at the time in the media and in government debates. What I really wanted to know was how had these once upright and pillar organisations fallen so sharply from grace. Again, there were few answers to this in the vast media discussions or even in the reports and inquiries conducted at a political level.⁵ The focus was on the decades of booming economies from the 1990s, with scant attention paid to the preceding decades of transformation. In a similar vein we heard a lot from the upper echelons of the banking world and their perspective of their organisations and the industry. A glaringly obvious omission from the GFC discourse was the voice of the ordinary worker. These are the people who tread the corridors and interact with customers; they know the banks, have invested their careers and lives into them and are an often ignored source of interesting and unique knowledge about their organisations.

My research into the banking world began in earnest in 2012 and at the time I feared that the current state of banking would become the new story of banks. I wanted to know more about these fascinating organisations and I hoped that I could tease out a picture of banking over 40 years that was relatively untainted with experiences of the GFC. My knowledge and experience of banks, which I soon realised was only scratching the surface, were that they were somehow special and unique types of organisations. They are, or were, in every town and community and presented a grand (and sometimes stuffy) image to the public. If asked to think about a bank I remember standing in my local branch as a child afraid to move in the quite austere and stuffy environment. I also remember my awe at the top-hatted messengers who adorned the entrance to the Bank of Ireland at College Green in Dublin. Sadly they are gone now like many of the other traditions that symbolised the undeniable characteristics of these pillar and storied organisations. Like my wish to avoid talk of crisis in the banks, I additionally wanted to see more than just a finely polished corporate story of banking. With this in mind I set out to talk to ordinary bank workers who could tell me stories of bank life, starting from the post-protectionist and post-war era of the 1960s and onwards to the 2000s, before the crisis kicked in.

A Bank Like Any Other

Ireland is an interesting place to study banks. As a small economy that spent many years in stagnation it began to expand when protectionist economic policies were abandoned in the 1950s. Ireland embraced this golden age of capitalism, albeit lagging behind many other countries in its speed of development. This lag presents a wonderful opportunity to explore such a profound set of economic, social and cultural changes from first-hand experiences. Bank workers were at the centre of community and economic life. Often moving between a diverse range of jobs across the country, they had a job-for-life and were truly invested in every aspect of an organisation that provided them with carefully crafted career progression and educational opportunities. I concentrated on collecting stories of everyday life for workers in one organisation, Bank of Ireland (the Bank).

Bank of Ireland was established in 1783; it is known locally in the finance world simply as ‘Bank’. It is a pillar bank, one that was created to take responsibility for economic stability and stem the continuous failures of private banks. It was, during its lifetime, a central bank, bankers to the government and the national mint. Eventually it handed over these tasks and became an ordinary bank that, over time, divided its operations between retail and commercial banking. Concentrating on a single bank in a single country does not mean that this study is irrelevant to other countries. This could be any pillar bank in any country, economy or society. Similar stories and transformative experiences are mirrored in other banks across the globe.⁶ As Europe headed towards rebuilding its political and social structures in the post-war period, Ireland followed by opening up its economy in the latter part of the 1950s. In a similar vein, industrial unrest across Europe in the 1970s was emulated in Ireland, particularly within the banking industry. In From Tellers to Sellers the various authors explore the changes to banking across Europe, Australia, New Zealand and the US during the 1980s and 1990s. The book’s editors note how there was a

Profound transformation of retail banks from stolid, strictly regulated organizations epitomizing lifetime employment to highly competitive enterprises with fragmented career structures and a new focus on sales and performance.⁷

These transformations are reflective of the developments in the Bank as told by the workers.

A Unique Perspective of Banking Organisations

The workers’ stories bring a unique and often untapped perspective to life inside the Bank and its developments from the 1960s. Workers in any organisation are well placed to accumulate an endless amount of knowledge that is often unavailable to outside observers. The workers’ stories add a comprehensive layer to the many easily accessible public sources that set the economic and social scene from the late 1950s. From 2013 to 2015 a number of current and former workers of Bank of Ireland were asked to tell the stories of their careers in the Bank. Initially I asked for stories that covered a period from the 1960s until the early 2000s as I wanted to avoid the financial crisis as the starting point. Inevitably the conversations included mention of the crisis, but in this way they are not the dominant story but emerge, organically, as partly formed proto-stories⁸ and as a type of sense-making around these events. Prior to the interviews I gave the storytellers instructions to think about life inside the Bank from the mundane routines of everyday life to the eccentric characters that crossed their paths.

These are ordinary workers at all levels who are placed across three distinct eras: the break-up (1960 and 1970), the transformation (1970 and 1980) and the drive to efficiency (1990 and 2000). Through these workers, who have experienced life in rural and urban settings and from junior bank officials to retail bank managers and non-finance roles, the story of life inside this long-standing institution can be woven together into the overarching tale of transformation and its effects. They are workers, across the generational divide, who have strong emotional connections with their bank and the industry. Through their careers they have become invested in the organisation’s culture and have a deep understanding of the importance and uniqueness of their industry. It is through these stories that we can begin to develop a deeper insight into what a bank is, beyond its financial and economic offerings.

The stories are the real insider’s account of what banking was and what it has become. They allow for a unique exploration of how workplace identities are negotiated as the industry and its culture are transformed into a modern and dynamic place facing fast-moving global markets. It is the stories that inform the findings in this book and which lay the...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. Making the Break
• 3. An Era of Transformation in the Banking Industry
• 4. The Modern Bank Workers
• 5. Transformations of Care and Community
• 6. On Memories and Rehabilitation
• Back Matter