"The system is built to be gamed."
"The voices of dissent are not being heard."
These are the words of an anonymous executive at one of America's 10 largest banks, who after many years of watching the worst of Wall Street's ethics transform his company, has decided to speak out.
Despite the obvious risks to his banking career, the executive, who's been in the industry for more than 20 years, says he can't bear to keep quiet any longer: "I decided that I cannot live with the extent of the compromises to my value system."
In early April, the executive in question started the anonymous blog, The Fourteenth Banker. Intended as forum for bank insiders who feel muzzled by industry gag orders, the blog gets its name from a now infamous March 2009 White House meeting with the heads of the nation's largest banks. (It's also a reference to the book, "13 Bankers: The Wall Street Takeover and The Next Financial Crisis" by Simon Johnson and James Kwak.)
HuffPost recently spoke over the phone with "14" -- for lack of a better name -- about what exactly pushed him to speak out and why he thinks his industry is in dire need of reform. He agreed to speak on the condition that certain aspects of his career and employment were left out.
The executive, who currently works in a management role at a U.S. bank that took TARP funds, described the rapid dissolution of the traditional banking functions at his company in favor of short-term fixes and often exaggerated profits. He described a flawed incentive system that produced generous salaries for many of his colleagues, while reducing lending to credit-worthy Main Street borrowers. That system, he says, has caused his own moral crisis.
A self-described former disciple of the "Adam Smith, conservative lassez-faire school of thought," he has spent most of his career dealing with what's typically considered the backbone of banking: lending to small and medium-sized businesses. (It is also, incidentally what bailed-out banks have been widely criticized for reducing.)
As his industry experienced a wave of consolidation and mergers over the last few decades, he says his bank has become fully committed to the strategies that were once reserved for investment banks. In short, the money culture of Wall Street began to transform the familiar world of branch-based banking.
"Incentive is everything," he says of the changes. "The same sort of ethical and questions and compromises seen at investment banks have that infected the whole organization."
At the heart of the executive's moral crisis is his bank's compensation structure, which has come to resemble the pay schemes of bank trading operations. Though he hasn't been explicitly told to stop making loans, he says the retail banking industry's compensation systems have come to put an outsized emphasis on selling fee-based products (think credit cards) and acquiring deposits.
In other words, at his own bank it no longer pays for him to actually lend money to the kind of businesses that create 75 percent of jobs in America.
'The Fourteenth Banker,' Anonymous Bank Insider, Describes His Moral Crisis: 'The System Is Built To Be Gamed'