Satyajit Das on What Went Wrong With Finance. Rentier finance. Why is the financial system so fragile? To learn or not to learn. Banking, Finance & Politics. Supermarket banking. At the recent Occupy debate on "Socially Useful Banking", Andy Haldane argued strongly for culture change in banking, and particularly in retail banking - the sort of banking that ordinary people rely on for their payments, their short-term savings and their loans.
And he claimed that structural separation of retail banking from what are viewed as "higher-risk" activities such as investment banking and trading would end cross-contamination of culture and enable retail banking to return to its roots in relationship management and judgement based on local knowledge. He said that the ring-fencing of retail banking as proposed in the Vickers report on reform of banking may not be enough and full separation would be considered if necessary.
".....financial and human resources were diverted away from retail banking services and non-bank activities towards investment banking. I don't agree. I have reason for saying this. But I would issue a word of caution here.
Wall Street, investment bankers, and social good. A few months ago, I came across an announcement that Citigroup, the parent company of Citibank, was to be honored, along with its chief executive, Vikram Pandit, for “Advancing the Field of Asset Building in America.”
This seemed akin to, say, saluting BP for services to the environment or praising Facebook for its commitment to privacy. During the past decade, Citi has become synonymous with financial misjudgment, reckless lending, and gargantuan losses: what might be termed asset denuding rather than asset building. In late 2008, the sprawling firm might well have collapsed but for a government bailout.
Even today the U.S. taxpayer is Citigroup’s largest shareholder. The award ceremony took place on September 23rd in Washington, D.C., where the Corporation for Enterprise Development, a not-for-profit organization dedicated to expanding economic opportunities for low-income families and communities, was holding its biennial conference.
There is something in what Mack says. John Lanchester · The Art of Financial Disaster · LRB 15 December 2011. No essay in English has a better title than De Quincey’s ‘On Murder Considered as One of the Fine Arts’.
I wonder whether, if he were alive today, he might be tempted to go back to the well and write a follow-up, ‘On Financial Disaster Considered as One of the Fine Arts’? The basic material might be less immediately captivating, but there’s a lot to choose from. As Warren Buffett has pointed out more than once, ‘It’s only when the tide goes out that you learn who’s been swimming naked.’ Financial and economic downturns always cause a rash of scandals and exposure. The tide has gone out – it’s still going out – and, frankly, it’s hard to know where to look. In the UK, our most recent outrage has featured Northern Rock, the bank whose collapse in the autumn of 2007 was the first harbinger of the credit crunch and subsequent Great Recession.
Buttonwood: The golden rules of banking.
Financial Sector Fraud. The Regulators.... Cognitive Regulatory Capture. Under construction... Banking - curators...