Dear Mr Carney,
Who exactly is guarding the guards?
It is a well trodden route. New CEO calls in a large management consultancy who recommend change. That change either consists of knocking down walls, or if the walls have all been knocked down, building a few up. You have got the “Template A” business plan, as opposed to the “Template B” – That was given to poor Hector Sants.
Why am I so cynical? It’s not because of the concept, far from it. It is because I fear for the execution.
When you were at the House of Commons, you quoted Donald Rumsfeld, his “known unknowns”. What you need to fear are Rumsfeld’s “unknown unknowns”.
In your Bank, it is alleged that someone knew about FX rate fixing and failed to disclose it. You have called in outside experts to investigate, and hopefully they will get to the bottom of the issue. But first they have to find all of the relevant information, then they have to analyse it.
In your new de-siloed operation, how do you intend to make sure that the same thing does not happen again?
Those that you regulate are beginning to bring in highly sophisticated monitoring tools that look at e-mail and phone calls and word documents and whatever else is out there to try to look out for problems before they hit, the “unknown unknowns”. And if they do hit, all of that information is stored in one place, and accessible to all of those who need them.
It is one thing to announce a bold new strategy: It is quite another to say exactly how you are going to carry it through. Tell the world that you intend to regulate yourselves with best-of-breed technology, that you will submit yourselves to regular audits that show that your new de-siloed organisation really is communicating, that it is, in that now much overused phrase “fit for purpose”
Mr Carney, I admire the fact that you have admitted there is a problem. I only hope that by appointing a new deputy to deal with it that your commitment does not end there.
Ask those who you are regulating how you should regulate yourself – You may be surprised to find out quite how hard it is.