Banking with Integrity: The Winners of the Financial Crisis?

230 Pages·2012·1.619 MB·English

by  Heiko Spitzeck, Michael Pirson, Claus Dierksmeier (eds.)

Banking with Integrity
Humanism in Business Series
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and independent network that promotes the development of an economic
system with respect for human dignity and well-being.
The Humanistic Management Network defends human dignity in face of its
vulnerability. The dignity of the human being lies in its capacity to define auton-
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We believe that market economies hold substantial potential for human devel-
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Titles include:
BANKING WITH INTEGRITY
HUMANISTIC MANAGEMENT IN PRACTICE
HUMANISTIC ETHICS IN THE AGE OF GLOBALITY
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Banking with Integrity
The Winners of the Financial Crisis?
Edited by
Heiko Spitzeck
Michael Pirson
and
Claus Dierksmeier
Selection and editorial content © Heiko Spitzeck, Michael Pirson and
Claus Dierksmeier 2012
Individual chapters © the contributors 2012
Foreword © David Grayson 2012
Softcover reprint of the hardcover 1st edition 2012 978-0-230-28995-6
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First published 2012 by
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ISBN 978-1-349-33114-7 ISBN 978-0-230-34649-9 (eBook)
DOI 10.1057/9780230346499
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21 20 19 18 17 16 15 14 13 12
Contents
List of Tables vii
List of Figures and Boxes viii
Foreword ix
Notes on Contributors xii
1 Introduction 1
Heiko Spitzeck, Michael Pirson, and Claus Dierksmeier
2 ABN AMRO REAL – A New Bank for a New Society 21
P atricia Palacios and Michael Pirson
3 Banca Popolare Etica 36
Antonino Vaccaro
4 Banca Prossima 48
Alessandra Dal Colle and Marco Morganti
5 Branch Banking and Trust: Community Banking
Based on Core Values – Can It Survive? 64
Stephanie A. Snyder and Jennifer J. Griffin
6 CEI Capital Management LLC 76
Fiona S. Wilson, James E. Post, and F. Robert Wilson
7 Cooperative Bank of Chania 91
Theodoros A. Katerinakis
8 GLS Bank: Successfully Sustainable 107
Eva Schneeweiss
9 Industrial Credit and Investment Corporation
of India (ICICI) Bank: The Emergent Bank of the
Emerging Economies 115
Radha R. Sharma and Philip Abraham
10 People’s United Bank 129
Anuj Gangahar
v
vi Contents
11 S horeBank Corporation: Let’s Change the World 141
Fiona S. Wilson and James E. Post
12 T riodos Bank – Mission-Driven Success Pays Off:
From Dutch Enfant Terrible to European Business Leader 158
Frank Jan de Graaf
13 W ainwright Bank and Trust Case Study – Humanistic
Management in Practice 169
Christine Arena
14 I nvestment Banks that Prospered 182
Anuj Gangahar
15 Conclusion: Living Alternatives – Banking with Integrity 192
Heiko Spitzeck, Michael Pirson, and Claus Dierksmeier
Index 207
Tables
1.1 The consequences of the financial crisis for
selected banks 5
1.2 The continuous loop of crisis and regulation 9
1.3 Cases presented in this book 18
2.1 AMRO REAL’s new business model 32
3.1 Key financial indicators in euros 44
4.1 Management in the banking industry: traditional
model vs. Banca Prossima’s humanistic model 61
7.1 Personality engagement initiatives 102
7.2 Corporate statements of CBC in campaigns 103
9.1 Comparison of management practices of
foreign banks versus ICICI 126
12.1 Key financial figures 161
13.1 Humanistic management in the banking industry 180
15.1 Competitive advantages used by banks during the crisis 195
15.2 Mission statements of portrayed banks 197
15.3 Principles adopted by the portrayed banks 199
15.4 Civic lobbying of some banks 202
vii
Figures and Boxes
Figures
1.1 The widening income gap 16
2.1 Bank of value concept 23
7.1 Scope and figures of CBC in Greece (Crete and Attica)
and the distribution of cooperative banks in 13
Greek regions 93
Boxes
3.1 Banca Etica’s values 39
3.2 Banca Etica’s mission 40
3.3 The Social Balance Sheet (Bilancio Sociale) 42
4.1 Consorzio PAN – Progetto Asili Nido (Crèche Project) 51
12.1 The mission of Triodos bank in 2002 163
viii
Foreword
In his book The Black Swan: The Impact of the Highly Improbable,
published in 2007, before the extent of the global financial crisis
became apparent, Nassim Nicholas Taleb wrote:
We have never lived before under the threat of a global collapse.
Financial institutions have been merging into a smaller number
of very large banks. Almost all banks are now interrelated. So, the
financial ecology is swelling into gigantic, incestuous bureaucratic
banks, so that when one fails they all fail.1
In The Necessary Revolution: How Individuals and Organisations Are Working
Together to Create a Sustainable World, also written before the full extent
of the crisis became apparent, Peter Senge and his co-authors compare
the current Industrial Age to financial bubbles:
We are all familiar with financial bubbles, the metaphor invented
by economic historians to make sense of a recurring puzzle: How is
it that financial overexpansion and collapse occur time and again,
drawing otherwise bright and clever people into ruin?
The answer is that during a period of expansion, in effect, two par-
allel realities develop, one inside the bubble and one outside. Both
feel equally real to those who live within them. But the more the
bubble grows, the more people are drawn into its powerful reinfor-
cing beliefs and perceptions. Eventually, those inside the bubble
become so absorbed by their reality that they literally can no longer
understand the point of view of those outside.2
The crisis which began as a financial one has spread and led to strikes
against foreign workers, violent demonstrations and civil unrest in
countries as diverse as the United Kingdom, Greece and China. Already,
the crisis has left commentators and politicians struggling with the-
saurus and history books, to describe the gravity of current events and
find comparisons. By now, it is clear that we are entering an era of con-
sequences for the reckless global explosion of credit and the creation
of ever more esoteric financial instruments, the risks of which either
were not understood in an era of global connectivity – or those who did
ix