A group financial reporting manager gives her perspective on banker-bashing, the 'too big to manage' question and external auditorsIs banker-bashing actually counterproductive?Here's an interesting thought for all you banker-bashers out there. Today's interviewee was trained as an accountant and works for group finance in a major bank: "We pull the numbers together across the bank. This is fed straight to the bank's chief executives."More about that in a minute, but first the interviewee's thoughts about banker-bashing:"The sort of people that you would want to work in a bank are exactly the sort that are being driven away from the industry because of the banker-bashing. I feel that, if we accept that banks need to exist, then we need to allow for some people to work in them without being made to feel like villains. The sort of people who take the banker-bashing to heart are probably the same people who take the responsibilities of their job seriously."Special pleading? The interviewee is making maybe 10% more in salary than she would in a job for a non-financial services company.Is your bank too big to manage, I asked her. Well, she said, "how can you possibly have oversight of a hundred thousand employees?"She also remarked:"I wonder if we can ever be close enough to the numbers to really know what's going on. You have got the trader, who passes the information about his trades on to a 'product controller', who passes it on to the finance team in the investment banking operation, who then pass it on to us. That's a lot of layers."The interviewee emphasised how after the crisis group finance reporting has been strengthened. Still:"You could call what we do a ritual, I guess. Every season we do the same thing, to a set timetable, leading to the same results that allow the bank to say: look, it's under control. The problem is, nobody really understands the banks any more, and that includes insiders. We are meant to understand the bank, and show the numbers illustrating that understanding. In reality it's almost the other way around, we have a process in place to collect the numbers and if that collection takes place properly, every step is followed, then the outcome is recognised as legitimate. It's a legitimising operation."And how about the external auditors from the "big four" accountancy firms?"They are meant to be an external check on the bank, signing off on our books. But it's almost like they work in the bank. They have their own desks, sometimes with personal stuff up. It makes sense as they spend all their time in the bank."The interviewee sees a deep conflict of interest for external auditors:"I believe external auditors should be assigned by the government, and change every few years. How can they make independent judgments of us when we are their biggest clients? I can see what your external auditor interviewee means when he says that in a way he is 'incentivised not to find anything'. How it works is you show external auditors a piece of paper with the number on it that they're looking for and they go: OK. I mean, to know what that number corresponds to you'd have to see evidence, you'd need to have a breakdown of how the business unit operates. Given how unintrusive external auditors are we could have a whole separate accounting system without them knowing."It would be really interesting to get other insiders to weigh in on the banker-bashing, the "too big to manage" question and the usefulness of external auditors. Before leaving a question or comment please do read the full interview for context. Asking something that is actually being discussed at length in the full interview doesn't make you look good. Also, it's a waste of the interviewee's time.Read onThis banking blog features interviews with more than 90 insiders across the world of finance. Here is a guide to help you find your way. For insiders there is this index of interviewees ranked by activity.One of the "many layers" the interviewee talks about is the product controller. Here one of them talks about confronting his traders: "If product control were a beast in the animal kingdom? Maybe bees? Or ants?"There are also "happy bankers". This one says: "I'm the kind of person who wants to swim with sharks and see if I can survive." Do read what happened to him next, though.BankingFinancial sectorAccountancyJoris Luyendijktheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
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