Guarding against banking greed?
So today we get a squint at the new regulations that MAY be brought in to guard against the greed, ignorance and arrogance that brought about the banking melt down and consequent financial crisis last year.
Sir David Walker’s interim report lands on the chancellor’s desk today. It is said to reveal the unbelievable lack of knowledge that existed on many bank boards.
He does have a plan to force financial institutions to publish the pay and remuneration of senior dealers, managers etc. He also wants people to be qualified for the job. The trouble is that this is still a closed club that dominates the City of London, despite the influx of ‘foreigners’ courtesy of globalisation.
The Financial Services Authority has refused my Freedom of Information request to reveal the 51 people they ruled unfit for the jobs for which they applied in the Financial Services Industry – they would not even reveal the jobs for which they applied.
So don’t hold your breath on greater transparency. Indeed I can’t believe that those 51 were the ONLY people they have rejected this year, but they have published no numbers since.
The greatest fear is that we return to exactly the same landscape that brought about this last financial disaster. Great hope is vested in Sir David Walker and his report, let’s hope it is justified.
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There was a good piece in the FT on Monday by Nicholas Taleb, the Black Swan author, which said that the mathematics which underlies finance is basically useless. So the ignorance is not just at the board level of the banks but deep in the back office of these institutions as well.
Would you fly in a 747 if you were told that the maths and engineering behind it were bogus? Me neither.
Meanwhile the financial establishment seems perfectly happy to continue to use a mathematical framework for modeling extreme risk which is basically “useless”. Strange isn’t it?
You may think that it is irrelevant, however there is a need to get things moving and at present I have the time.
This is the only link I can think of………
Prince Charles in his Dimbleby lecture talked about the biggest bank of all becoming bankrupt; THE RAINFORESTS
You have been discussing the carbon foot print and renewable energy on the box .
The Princes “Rainforests project ” highlights the need to tackle the problem from its source and that movement is growing.
Another question for the experts.; Why are we not considering HEP, we don’t live near Niagra Falls , but we do have waterfalls and what is more we can create them?
Jon
I think you should do some research on who owns the Reserve Banks, the real role of Goldman Sachs in the current (and previous) financial crises, the role of the Rothschilds in the global financial and political systems. Start digging and reporting on the pillars of our capitalist structures not the facades. We need transparency then we can create real change.
I just can’t stand the complacency and arrogance of the people in the city and in parliament, who seem to have done nothing since the taxpayers dug them out of the mess they created.
Lots of fine words but very little action – still huge salaries and bonuses and still the same old same practises got us into the mess. No doubt there are still the same non-exec pals (probably including MPs) picking up big cheques for the odd day here and there (plus expenses, of course) as long as they don’t rock the boat.
And now our MPs are going on holiday (sorry, back to work in their constituencies) until October! Meanwhile the rest of us keep plugging away for peanuts (if we are lucky enough to have jobs).
A plague on all their houses
The last year has shown these people know absolutely nothing about anything. You would have had better care taken of your money by giving to the bloke down the road on benefits, and told him to put it on what horse he has picked out the Racing Post,the next time he is in the bookies.
Jon, I believe that your request for information could not be granted as, under EU law, such would breach the rights of certain individuals. You won’t get far asking for details of a lot of criminals for similar reasons.
Also, I am told that a fair number of applications are deemed “unlikely to succeed” way before they get to the formal application stage, so do not appear in the rejection statistics.
The risk management in banks has been lamentable for many years. The head of risk at a global bank once told me that “we have invested over 200 million dollars in computer power and the best brains to run it, so we’re all right.” I am certain that the possession of computer power became a substitute for thought in an environment where financial “technology” was changing as fast as it’s IT support technonolgy.
I am quite optimistic that we are unlikely to return to the same old “system”. What concerns me more is that we will destroy an industry vital to our national economic viability. Make no mistake, the overwhelming majority of bankers are not the villains currently portrayed. That view is simplistic sound biting and totally unhelpful.
That said, we clearly need a simple separation of retail and commercial banking from investment banking, which will always carry high risk. This is easy to achieve and will be the only basis for a recovery in the flow of credit.
[...] 4’s John Snow has weighed into the debate as well, questioning whether banks can really change their greedy [...]
Does anyone remember Mrs.T.’s mantra: Housekeeping, balancing-the-budget and so forth…I must be getting old in my old age, but wasn’t life simple then, before the effects of…er…Mrs.T’s housekeeping/balancing-the-budget/etc…
In the context of private pensions and endowment policies failing to perform for customers of the Financial Sector, I see the huge salaries and bonuses in the City as a form of embezzlement…
Madoff has been sentenced in the USA.
Some British Bankers need to be banged-up too…
jon knows the time, and it aint a quarter to nine.
investment in new power sources….
M B-J: you’re right, but what are these ‘new’ power sources? If solar/wind /etc account for, say, 5-10% of our energy needs now, then in 30 years time, with more of us needing more energy to do more things(inevitable), then solar/wind/etc may by then only account for, say, 3-5% of our energy needs. We have a massive energy-shortfall problem – it can only get worse: nuclear power carries massive security/contamination risks, but it is clean. We’ve rolled the dice, and have to go this way.