Friday the 13th is, arguably, not a bad day to introduce measures to prevent disasters from happening again. The Dutch Finance Minister, Jan-Kees de Jager, chose this day to introduce reforms in the banking and financial services industries. One of the changes envisaged by the Finance Minister is the introduction of an oath of office for bankers. Bankers and other employees in the financial services sector will be obliged to take part in a ceremony in which they swear to execute their job diligently, honestly and with regard to the public and their clients’ best interest.
Usually, an oath of office is required of holders of public office, that is public officials (e.g. ministers, judges, MPs) and public servants (e.g. police officers, civil servants). The justification for requiring an oath is that the public interest is at stake. Society cannot function properly if such officials do not perform their job honestly and impartially. But this justification is not limited to workers in the public sector. Doctors, lawyers, official translators and even real estate agents are deemed to deliver services essential to society as well and need to take an oath too. Extending this obligation to banks and related industries is a small step. We have learnt, to our cost, how essential it is that the financial sector operates with integrity and without taking unnecessary risks. An oath of office for private sector employees, such as bankers, is not without precedent.
A different question altogether is whether an oath of office is really necessary to impose better standards of conduct on bankers. From a strictly legal point of view, the answer to that question is no. Those standards can be incorporated in contracts, collective bargaining agreements and legislation, and to some extent those rules are in force already. An oath will not make the existing rules and new rules ‘more compulsory’ than they already are. Contravention of them might ultimately lead to dismissal or criminal prosecution even. The Dutch Supreme Court has ruled that banks have a duty of care vis-à-vis their clients, notably they need to inform them about the risks of their financial products. In this respect, imposing an oath has no added value.
According to the Minister the oath is meant to emphasize, to strengthen the moral dimension that bankers should take into account while for example investing in shares or deciding on eligibility for mortgages. Although taking an oath does not create more legal obligations, it might make a banker more aware of the duties to society and his clients that his position entails. He might feel a stronger obligation to honour them, since he personally and specifically promised to do so. It might strengthen the moral fibre that (some) bankers have seemed to be lacking over the last decade.
The proposed bankers’ oath has, in the end, mainly a symbolic value. Symbols can have a real meaning, though.