In the Netherlands, bankers turn to God — by law

February 12, 2014


Lloyd Blankfein, the chief executive officer of Goldman Sachs, once famously said he believed banks were doing “God’s work.” Now, the Netherlands is going one step further: starting later this year, all 90,000 Dutch bankers will have to swear an oath that they’ll do their “utmost to maintain and promote confidence in the financial-services industry. So help me God.”

It’s part of a major attempt by regulators and banks to clean up after the financial crash of 2008, and put behind them scandals that continue to blacken the financial service industry’s reputation. Just last October, the big Dutch cooperative bank Rabobank paid a $1 billion fine to settle charges in the Libor rate-fixing scandal.

Board members of the banks have already been required to swear the oath since last year, but now it’s being expanded to cover everyone who works in the sector. It consists of eight statements, including promises not to abuse knowledge and “to know my responsibility towards society.” There’s also a new banking code, a special declaration of moral and ethical conduct that all board members are required to sign, a “treat your customer fairly” initiative, and a “suitability” test for executive and non-executive directors of supervisory boards.

Bankers who fundamentally object to invoking God’s name can instead pledge: “This I declare and promise.”

The Dutch Banking Association, which is behind the move, says it is still developing the disciplinary procedures and sanctions for bank staff who are found in breach of the pledge.

“The idea is to set the tone at the top,” says Robert Van Altena, a partner at KPMG in Amsterdam. “The banks themselves realised that they have to regain trust.”

That’s a tall order, and one that, at this point, may actually require some divine intervention to achieve. According to an annual survey conducted by consultant Ronald Pont, public trust in Dutch bankers has dropped from 92 percent in 2008 to 34 percent today. Pont, who himself used to work at Fortis, a financial services conglomerate that was nationalized by the government after 2008 and then broken up, says people used to be worried about banks failing; now they mistrust them because they seem to neglect customers’ needs.

So will swearing an oath make a difference? “It’s ridiculous,” says René Tissen, a professor at Nyenrode Business University in Breukelen, who jokes that the pledge should be referred to as “the Bernanke oath.” “People wonder whether bankers will ever adhere to it, in the light of the culture of self-enrichment. There’s a deep distrust, and it keeps coming to the surface.”

It’s easy to mock the initiative. Yet the Dutch have a point in identifying the fundamental problem. While there has been a slew of regulatory initiatives across Europe to shore up balance sheets — the latest being a new round of stress tests carried out by the European Central Bank — there has been little action aimed at curtailing the sort of “Wolf of Wall Street” attitudes that have been rife on trading floors and, at times, in executive suites.

The Dutch banks are following a long tradition of professionals swearing oaths. It was part of the ritual for “Masters” in craft guilds in the Middle Ages. The Hippocratic oath for doctors dates back to the 5th century BC. Lawyers have to swear them to be admitted to the bar. And over the past two decades, even if they haven’t had to evoke God, companies around the world have adopted codes of conduct. An entire industry focused on corporate social responsibility has sprung up, giving work to numerous consultants.

In that vein, requiring bankers to make a public ethical pledge is a step that some believe could help bring the financial sector back down to earth. Angus Tulloch, a managing partner at fund manager First State Investments, told members of the Scottish parliament this month that an oath of some sort is a good idea, because “the financial sector has become almost completely detached from the real world.”

The question is, of course, whether it can be effectively enforced. “Regulation of behaviour is a pretty big ambition,” says Ben Boyd, who heads the corporate practice division at Edelman, the New York-based global public relations company that publishes an annual trust barometer. Banks once again come out at the bottom of the heap in the 2014 survey. Boyd says what will change behaviour more anything are strong leadership and clear motivation, especially when it comes to compensation packages.

The Dutch are trying to ensure that their measures do have teeth. They can’t guarantee that offending bankers who have taken the oath will be struck by lightning bolts, but they have already put in place an array of sanctions for top executives, even as they decide on how to deal with less elevated bankers.

Take the new “suitability” rules for supervisory board members, which came into effect in 2012. They lay out a range of criteria, including the professional knowledge, experience and skills required of each board member; any previous disciplinary proceedings are a red flag. Last year the Dutch Central Bank and the Authority for the Financial Markets announced that nearly 10 percent of the supervisory board members of the four largest Dutch banks and insurance companies had failed these suitability tests, and were thus either released from the posts or prevented from accepting an appointment.

Would moral safeguards have prevented the 2008 meltdown? Probably not. The Netherlands was badly hit; as well as having to nationalise Fortis, the government injected capital into the biggest bank, ING, and insurer Aegon. A parliamentary inquiry into the rescue efforts in 2012 concluded that the government had made major mistakes in its handling of the crisis.

Professor Tissen says the only way to restore trust and avoid another meltdown is for banks to be split up. Above all, “people want transparency that’s easy to understand. They’ve turned against globalized finance. They want banks cut down in size,” he says.

Still, in a country with deep Protestant roots, a little God-fearing can’t do any harm. And, who knows, it may just do some good.


PHOTOS: Reinhard Marx (L), new archbishop of Munich and Freising takes oath on the Bible during his inauguration ceremony in Munich February 1, 2008. REUTERS/Michael Dalder 

Employees of ING group walk in front of their office during their lunch break in Amsterdam November 7, 2012. REUTERS/Michael Kooren

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Did someone tell Satan to reserve a whole bunch of rooms???

Posted by ineeditbad | Report as abusive

How about a law that says if the board overlords of the master banks need another taxpayer funded bailout, they are held down in coffins, and silver spikes hammered through their hearts.
On national TV, so all can see their teeth revert to fangs, etc.
Worked for the god squads in the past they say.

Posted by Neurochuck | Report as abusive

This is extremely depressing by all means.

Posted by TheLastNomad | Report as abusive

Seems to me that if I swear something on my own cognizence then I am obligated to honor that. But if I am compelled to swear to a false god then I only owe cognizance to that god, which negates any obligation I have to honor the oath.

Posted by zoniedude | Report as abusive

“It’s ridiculous…People wonder whether bankers will ever adhere to it…”.

No need to wonder. Look at American judges, all who must submit to an oath of office before assuming their robes and authority. For over a hundred years the American Supreme Court has been hacking away at the very roots of judicial accountability. For at least forty years the “judicial culture” has been essentially freed of even paying lip service to those they purportedly serve.

No American judge at any level becomes vulnerable, professionally or financially. Whether they act contrary to law, invoke the wrong law, act with incompetence or even with clear malice their victims no longer have any meaningful remedy and the saddest part of this travesty is that few seem to know or care beyond those unfortunate victims of increasingly common judicial abuse.

In my opinion it is improper to presume judges “honorable” when there is evidence, however inadmissible, to the contrary. Bankers? You’ve GOT to be kidding, particularly in secular Europe. They’re not even elected to their posts!

Posted by OneOfTheSheep | Report as abusive

God of Darkness?

Posted by UselessEater | Report as abusive

Bankers don’t worship “God,” they worship money. If they made them swear on a stack of Euro notes it might be more effective.

Posted by Floridaman19 | Report as abusive

The banker’s god is cocain.

Posted by seafloor | Report as abusive

This is utterly ludicrous. Enforcing existing laws against theft and fraud would serve far better than to have this ludicrous charade. Financial industry registration – like doctors registered with the BMA – would serve far better, with possible de-registration being a penalty for those who fail to maintain finance industry ethical standards.

Posted by johndowdle | Report as abusive

This gotta be a joke. I didn’t know Dutch had sense of humor.
If the bankers believed a “GOD”, we wouldn’t be in such historic economic mess for almost 6 years now.

Posted by AmericanBison | Report as abusive

Let me see, 2014 minus 2008 = 6 years.
Is this the kind of crap they come up with after six years? Who would believe a banker is going to take an oath seriously.
Put back the regulation. Bankers have proved they cannot regulate themselves.

Posted by Tiu | Report as abusive

An American banker has no fear of God because in their minds, he doesn’t exist.

They have no fear of the SEC because it is the SEC’s duty to protect them as much as possible from the Federal Courts.

They have no fear of the federal courts because the federal courts are unable to incarcerate corporations (even though corporations are now people).

They have no fear of Congress because they have a long history of being generous to their friends in high places.

It’s no different in Europe. Only a naive fool would think that there isn’t already another financial crisis brewing.

Posted by breezinthru | Report as abusive