Why would Lloyds boast about culling risk controls?

Here’s a very odd story, that we must surely assume comes from Lloyds itself. 

Lloyds cuts risk management roles in bid to ‘move at greater pace’ 

Bank’s risk assessment method blocking change, internal review concludes … internal risk structures were acting as a “blocker” to change … The changes will help the bank in “resetting our approach to risk and controls” and enable Lloyds to “move at greater pace”, according to an internal memo seen by the Financial Times. Mr Nunn [CEO] has been ramping up the pace of change at the bank after setting out a turnaround plan in February 2022.

Well.  First of all, whoever this Charlie Nunn is, waiting more than two years before “ramping up the pace of change” sounds to me like being asleep on the job: a classic “re-launch” so beloved of failing governments and managements of all kinds.  FFS, he became CEO in August 2021!  I’m no revolutionary, but the longest I ever waited in a new managerial job before making changes at pace was about 3 months, and that delay (for such it was) was for a very specific tactical reason.  Ordinarily, it’s Machiavelli’s dictum that should rule: make your big changes straight away.  Two years is, frankly, pathetic.  (And check Nunn’s salary!)

Secondly, what sort of caricature BSD does he wish to be seen as, ostentatiously axing risk management posts?  I’m not really asleep at my desk, I’m a BSD!  Get out of the road, you risk managers!  We’d be making so much more money if it wasn’t for you!  Yeah, right.  Two years.

Thirdly, properly construed, the one facet of financial** risk management that can only with difficulty be a positive contributor to doing good business, is credit risk management.  There’s only ever bad news in credit: the best that can happen is that counterparty performs its side of the deal!  Which we kinda assumed in the first place, right?  And nobody ever pays you more than you billed them for, and says – hey, keep the change. 

Otherwise, financial risk management should be viewed as potentially a big positive contributor to doing good business.  It is good business you want to do, right?  Or is it a quick speculative buck: book the ‘profits’ today, grab the bonus and run away?  I start to wonder.

Finally, the joke is, “The shake-up will see 45 jobs removed from these risk teams, equivalent to around 1.5pc of the 3,600 people who work in risk jobs for Lloyds.”  In other words, it’s trivial, cheeseparing stuff anyway.  

ND 

(PS, I have never been a risk manager, in case you were wondering.  But I have worked with some brilliant ones.  Only in a dysfunctional organisation does RM stymie good business.)

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** There are loads of non-financial risks that fall into the same baleful category: ‘operational risk’ (- the catchall for a lot of shit-that-can-happen); and reputational risk, political risk etc etc etc.