Journalist John Lancaster dives into the British Payment Protection Insurance (PPI) scandal. PPI is designed to provide insurance for customers who owed payments (most likely mortgage and credit card) which for one reason or another they were no longer in a position to make (caused by illness or loss of job). In reality, most expected recipients are never paid because of "fine print" technicalities. The real reason the PPI affair is such a shocker isn’t just to do with the money: far more serious is the crisis in values and behavior it implies. The other scandals and crises are bad, and involve behavior that is variously unethical-to-criminal, but they also belong to a type that a very broadminded cynic would file in the already bulging category of boys-will-be-boys, subsection ’twas-ever-thus. Traders push the rules: that’s just who they are (Libor); drug dealers will find somebody, somewhere, who will launder their money (HSBC); Iran is a rich country with a lot of banking deals to transact, and frankly who cares if the Americans hate it (Standard Chartered). These were all serious breaches of ethics and the law, but they are explicable as specific things that went wrong in one part or another of big, complicated institutions facing a lot of big, simple temptations. The story of PPI is different because it involves a more basic breach of what banking is supposed to be about: looking after other people’s money. That’s the first thing that is qualitatively different about PPI; the second is that the misdeeds happened not inside rogue units of these huge global institutions but at the center of their retail operations. This was an industry-wide, systematic cheating of the banks’ own customers. lrb.co.uk/v35/n13/john-lanchester/are-we-having-fun-yet
Posted on: Sun, 07 Jul 2013 19:24:37 +0000
Trending Topics
Recently Viewed Topics
© 2015