The REGTECH Book

The End Justifies the Means: Putting Social Purpose Back at the Heart of Banking and Financial Regulation

By Anne Leslie

Senior Managing Consultant, IBM

When the year 2008 is mentioned, it is associated with the untimely demise of Lehman Brothers and the ensuing financial chaos that engulfed the global economy and rocked it to its very core.

Lost output in the United States alone amounted to as much as $13 trillion – an entire year’s gross domestic product (GDP) – with paper wealth lost by US homeowners totalling $9.1 billion.¹ On the other side of the Atlantic in the United Kingdom, conservative estimates of the lost growth in Britain amount to £1.8 trillion.² Moreover, that is without taking into consideration the economic losses caused by higher foreclosures on mortgages and increased unemployment since 2008.

Even if the 2007–2009 bust was synonymous (just like previous collapses) with a sharp decline in GDP, the direct costs of the crisis paled in comparison with the slump in growth that followed.

Today, we are still paying the price.

Lessons Learned or Business as Usual?

Benjamin Disraeli once said, ‘There is no education like adversity’. Yet, despite all the suffering and hardship that the financial crisis wreaked in the real economy, we continue to see banking scandal upon banking scandal in financial centres across the globe, from the rigging of foreign exchange markets and the manipulation of the London Interbank Offered Rate (LIBOR) to the heinous conduct of shadow ...