The minor blamestorm sweeping the bank over bad debts is unlikely to claim any casualties, but it might leave some noses out of joint.
A brief corridor chat with a colleague the other day informed me that a scapegoating exercise is under way.
Previously we would refer to “post mortems” but now we know them as “accountability reviews”, which of course is a far more comforting and constructive description for the process of assigning blame for the thumping great bad debt write-off that has just been made.
Regular readers will be aware that I have managed to avoid making a corporate decision since about 1982.
That leaves me with nothing to fear from the scapegoating, and therefore able to comment from a purely disinterested perspective.
With absolutely no knowledge whatsoever of the loan or customer concerned, I will make the following predictions:
The loan approval will be found to have been made outside of credit policy guidelines.
This is an easy one. We don’t provide training any more (victim of a cost-cutting program) – except for the online training, which I have described previously – and we hide our credit policy in an automated obfuscation system known as an “intranet”.
Quite frankly, it would be a surprise if our staff were aware the policy existed, but if they did find it they would discover that it was so out-of-date (courtesy of another cost-cutting program) that it would be foolish for them to obey it.
The departure from credit policy won’t be authorised.
Does this really require explanation? Who would be silly enough to authorise a departure from policy, however stupid the policy?
If the policy had been followed, the loan wouldn’t have been made.
Likewise easy. If we followed our own policies, we would rarely lend money to anyone who wasn’t able to comprehensively establish that they didn’t need it. This case would be no different.
The number of staff involved in apportioning blame for the mistake will significantly exceed the staff available to provide assistance to the bankers making the lending decision at the time the decision was made.
Most likely the lender will be reprimanded and denied his or her bonus but will not be terminated, unless this is a second offence.
Quite fair in my book. If you’re silly enough to make decisions you’re asking for trouble.
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