Cifa/Cima Assignment

CORPORATE GOVERNANCE – HALIFAX BANK OF SCOTLAND. If this week's report into the failure of HBOS makes one thing clear, it's that the problem in finance today is not greed. That's far too optimistic. The deeper problem is self-delusion, and not just on the part of top bankers. HBOS failed in 2008 when it had to be bailed out by the British taxpayer, at a cost of £20bn. After a thorough investigation, the parliamentary commission on banking standards concluded today that HBOS represented a "colossal failure" of management and "a model of self-delusion". Given its reckless lending, HBOS would have gone down with or without a wider financial crisis, and what the commission found most shocking was the comprehensive inability of the top three HBOS bankers to even admit this. How do top bankers become so detached from wider society? Over the last 18 months I have interviewed more than a 150 people working in finance for a Guardian banking blog, and virtually all of them speak of their lives as taking place in a social bubble. Take Will Martindale, who worked in investment banking before "escaping" to Oxfam: "I never intended to work [at JP Morgan] for more than a year, but you get caught up. You work very long hours, surrounded by people who do the same, and they become your friends. You are all on a similar income, you eat at the same type of restaurants, go on the same kind of holidays, live in the same kind of apartments, develop the same hobbies. You don't see poverty, if only because you go to work very early and come home late, often taking a cab provided by the bank." That's how it starts and, as you climb the ladder, people become really rather nice to you. This is how a former top banker in treasury described his time in a bank that failed: "Risk produces profits, profits lead to a higher share price, and executive pay was linked to that. It was so fucking easy to manipulate the share price; simply take some more risk. "I was having a great time – travelled