Scottish banks were at the heart of the UK economic crisis but financial institutions are intent on restoring the country’s historic reputation for ethical finance – in its broadest sense
When Scottish icons Royal Bank of Scotland and HBOS almost collapsed in 2007-8, rescued only by huge UK state bailouts, much of the pain was psychological. After all, prudence is central to Scotland’s self-image.
But the reckless lending and expansion that nearly brought down these giants – and their involvement in the UK-wide mis-selling scandals – also battered another proud tradition in Scottish banking: that of public responsibility and fair play.
As Professor Charles Munn of the European Financial Planning Association says, in Scotland business used to be seen as a calling, with three aspects: “To gain all you can, to save all you can, and to give all you can.” This switched, he argues, to a mindset of “shareholder interest”.
Five or six years after the storm, it is unclear how much has changed in global banking, structurally or culturally, to avoiding such crises in future.
For its part, RBS insists it has made a “whole raft of changes” for the better, including not just the stronger capitalisation demanded by new legislation but a less top-down management structure and a more open culture, among both staff and stakeholders.
Andrew Cave, head of group sustainability at RBS, says ethical lending considerations form...