José Manuel González-Páramo: “Ethics is the keystone of the banking sector”
The key for a financial institution to survive in such a rapidly changing environment is to abide by ethics, according to BBVA Executive Director José Manuel Gónzalez-Páramo. In a conference on Companies and Public Goods held by the University of Navarra’s Entrerprise and Humanism Institute, José Manuel González-Páramo emphasized that “ethics is the keystone of the banking sector”.
Pictures of José Manuel González-Páramo BBVA executive director
He indicated that supervision and regulation are important and complementary, but can never take the place of ethics.
He was also resolute in his conviction that the solution to banks’ reputation problem lies in the financial sector itself. “Banks have to act as leaders through self-regulation in order to rebuild trust and credibility. Clients should also e at the heart of all actions,” he affirmed.
He added that BBVA has a “distinctive responsible banking model based on a principled-approach to profit, strict compliance with laws, best practices and adding long-term value for all interest groups”. This responsible banking model is based on the principles of integrity, transparency and caution.
In this regard, José Manuel González-Páramo explained BBVA’s new purpose, which inspires the way the organization operates, “to bring the age of opportunity to everyone.” This purpose includes three ideas: 1) offer customers the best banking solutions; 2) help them make financial decisions; and 3) have a positive impact on their lives.
José Manuel González-Páramo, Executive Director of BBVA, during his speech
BBVA’s Responsible Business Plan
BBVA’s Executive Director then described the Responsible Business Plan BBVA released in 2012. It is a global plan grounded on three strategic priorities:
1) Transparent, Clear and Responsible (TCR) communication. The goal is to help customers make informed decisions with a more balanced bank-customer relationship. This will be the vital to rebuilding and maintaining trust. Transparency and clarity are essential to help ensure people always understand the products they acquire.
2) Financial education. Financial education facilitates greater understanding of the way the financial system works leading people to manage their debts better and save effectively. Without a doubt, it also enables informed decision-making, leading to more knowledgeable savers and more responsible debtors.
3) And the products with high social impact. In other words, products with distinctive social or environmental elements whose daily activity has a large social impact. BBVA promotes socially responsible investments and supports financial inclusion, taking advantage of new technologies’ potential.
“Organizations’ senior management should be responsible for managing this model,” maintains José Manuel González-Páramo. In BBVA, responsible banking is supervised by the Board of Directors and starting this year will be supervised by the Board’s Executive Committee.
Finally, José Manuel González-Páramo stressed that the professionals working for financial institutions are central to rebuilding trust in banks and improving banks’ reputation: “Integrity and ethical behavior should be a permanent part of their career and an essential component in their qualifications.”