ABSTRACT
Chapter 6 explores trust communications across the banking system, and the intersection between everyday banking and wholesale banking. No single area of financial markets has faced a larger trust conundrum than the banking sector. Structurally, the banking system sits high on the hierarchy of trust relations within nation states. The banking system underpins trust, allowing strangers to reduce risks by pooling their resources for more reliable returns. Applying the trust practice framework, banks employ the most powerful trust practice of all – protecting assets of millions of individual customers, small and large businesses, charities and governments. However, while we might be attracted to a particular bank for its special product offers or services, it is actually the wider banking system we trust. Since we have little choice in having to deal with banks, we give little thought to the illusory nature of that trust – it is an illusion that suggests our funds are readily accessible, when most are tied up in long-term loans of securitised instruments. We unconsciously trust the system to work on the basis that everyone will not need to withdraw their cash at the same time. Even more unconscious is the notion of who ‘everyone’ is – not only are banks highly interconnected, many large banks are further interwoven into the global banking system – so our bank may be dependent on faceless customers millions of miles away.
