There has always been scope for the interests of a bank’s customers to be in conflict or for the bank’s own interests to conflict with those of its customers. Yet of late you would think that this was a new phenomenon for banks. Barely a week now passes without press coverage of conflicts of interest (with concomitant references to resulting profits made by one financial institution or another).
The bubble years of the 1990s saw the further consolidation and deregulation of the financial services industry in general, with the result that individual financial institutions engaged in an unprecedented number of financial activities and services. One effect of this was that the scope for conflicts increased markedly, thereby giving rise to a greater likelihood that conflicts would not be managed effectively.
