An anonymous banker has started a blog site in which he claims he started because of the moral dilemma he is facing. The dilemma the banker is facing is one of being a part of a culture that can only be described by one word and that one word is greed. The mystery man who states that he is employed by one of America’s top 10 banks, was recently interviewed by The Huffington Post, had some alarming revelations including why small businesses are not able to get loans.

In the article it states that:

HuffPost recently spoke over the phone with “14” — for lack of a better name — about what exactly pushed him to speak out and why he thinks his industry is in dire need of reform. He agreed to speak on the condition that certain aspects of his career and employment were left out.

The executive, who currently works in a management role at a U.S. bank that took TARP funds, described the rapid dissolution of the traditional banking functions at his company in favor of short-term fixes and often exaggerated profits. He described a flawed incentive system that produced generous salaries for many of his colleagues, while reducing lending to credit-worthy Main Street borrowers. That system, he says, has caused his own moral crisis.

As his industry experienced a wave of consolidation and mergers over the last few decades, he says his bank has become fully committed to the strategies that were once reserved for investment banks. In short, the money culture of Wall Street began to transform the familiar world of branch-based banking.

“Incentive is everything,” he says of the changes. “The same sort of ethical and questions and compromises seen at investment banks have that infected the whole organization.”

Like a pre-crisis mortgage brokerage who pays its employees only on volume, but not on the quality of loans, he says his bank openly sponsors a compensation system that is actively manipulated by his peers. “People can game the system and receive large payoffs, and in my view those are violations of ethics.”

He says he’s raised these complaints with his bosses — even providing proof, in at least one case. But he has been either politely brushed off, or told not to raise specific issues. Worse, his daily interactions with clients have begun to feel like just another opportunity to drain money from them. “The thing that I enjoy in my day-to-day work is dealing with businesses and individuals and in a way that helps them. And I can say that it is much more difficult to do that today.

In addition this banker states that any reform bill should also include protection for whistle blowers so that the honest bankers can speak out. But the one disturbing fact is that this banker seems to think that the ‘too big to fail’ type of thinking actually adds to the problem, since banks believe they will be bailed out every time they fail.

The big question is this. Will banking regulations fix the problems in the banking industry, or it is to late to be fixed?

What do you think?

Comments welcome.

Source – HP article

The 14th banker site