Rebecca Duffett spoke with Aidan Vaughan from the Association of Christian Financial Advisors

Aidan Vaughan

There's been a fresh call for tougher bank regulation to curb a culture of greed and prevent a further financial crisis. Attacking the bonus culture, ACFA Chairman Aidan Vaughan has said: 'The public is angry when they see bankers again earning huge bonuses, when it is tax payers' money that has rescued the day. For most people, taxes are rising, wages are static, inflation is rising, living standards are falling and government expenditure is being cut dramatically. The banking crisis of the last two and a half years has been the result of a 60-year credit explosion, plus a toxic combination of unrestrained greed, globalisation and loose government regulation. The basic biblical principle of 'spending less than you earn' has been ignored on a massive scale.'

To find out more Rebecca Duffett spent some time talking with Aidan.

Rebecca: What sort of tougher bank regulation would you like to see put in place?

Aidan: It's a very big subject and we could give you a very long answer on that. But there are a few definite things; one is there should be a split between the investment banking side and the high street side, that's the lending and borrowing. It was really the investment banking side that got us into most of the trouble. That would be the first thing. Then it would be accountability to the shareholders. You and I, we own the two largest banks in the UK, RBS and HBOS. We the public own them and we've got a chance to reshape these two monolithic organisations before they go back into private hands.

Rebecca: Is the bonus culture within the banks all bad?

Aidan: We'd all love to earn a bonus, but it's all about trust. As the public, we think we've been bushwhacked and for bankers to go back to, if you like, their bad old ways and suddenly have millions of pounds in bonuses, I think that we the public and especially as Christians can say that's a foul.

Rebecca: Has anything actually changed within the banking system already? It seems that everything as far as bonuses are concerned has gone back to how they were before the crisis?

Aidan: Well as it stands it would appear that there is very little. However Mervyn King has stepped down and said that he really wants to take on the banks, which is great; but we have noted with Project Merlin, that the results of that have not been very good. It could be that things slip back to where we were. Of course our real reason for raising all these points is saying we've 60 years of a credit explosion here. If we let unregulated huge amounts of lending go on, then we could be in a worse crisis. For all those folk who have lost their jobs or life is not very good, we really want to avoid an even bigger crisis.

Rebecca: A lot of people have had to cut back and live on a budget. Is this something that people are getting better at because of the situation and perhaps this will help in the future?

Aidan: I would like to think so. Certainly the figures for debt and borrowing are coming down, so that's a really good sign. We've just got to work out what our needs are and what are our wants and learn to differentiate and then say, ok, let's do the really important things. As a Christian the most important thing is to be putting God first, because he owns everything.

Rebecca: Do you think that this greed culture within the banks is something that can be overcome?

Aidan: It would be lovely to think so, but we are caught in a slight bind aren't we in the UK, in that one of our major industries is of course banking. The City of London generates huge amounts of tax revenues and so it is a very important part of our lives. So yes we do want the banks and we want them to be very successful. We would like them to have a social dimension and a moral dimension too, that they would really add something to our nation and would not just be driven by profit and dare I say greed.