If they become afraid to lend simply because of the consequences of making a loan that goes bad, our economy will suffer. So a balance needs to be struck here. More broadly, having clear lines of accountability can help build trust. The Banking Executive Accountability Regime (BEAR) is helpful here. This regime is, however, largely limited to authorised deposit-taking institutions and to prudential matters.
It is worth thinking about how the same focus on accountability can be applied to a broader range of financial services and to conduct issues as well. As we do this, though, we should not lose sight of the fact that it is the banks' boards and management that are ultimately responsible for the choices that banks make.