Jail Reckless Bankers?

CLAPTON

John1993 wrote: »

I don't know if you are aware of how risk is assessed and allowed in investment banking, but it's very, very far from cavalier. Traders have strict limits on how much they can take on, monitored daily, and management get very upset if the limits are breached. It nearl always leads to disciplinary matters.

I've traded in big name banks for a great many years, trough all manner of crises, and just don't recognize the categorization of what most of us do as reckless.

If we take Northern Rock as an example, it was probably only a handful of people there who decided to try to increase profitability by lending long-term and covering it in the short-term cash markets. With hindsight it was foolish, but was it really criminal? Do you think that anyone doing it knew it would end in disaster but just went ahead?

People who'd never dream of generalizing about other groups have seemed very keen to do so about people working in banks in recent years. I just wish that the criticism was at least informed.

you cannot be serious

well you aren't, are you?

TruckerT

John1993 wrote: »

Do you think that anyone doing it knew it would end in disaster but just went ahead?

They didn't much care - they were chasing the bonus.

TruckerT

John1993_2

TruckerT wrote: »

I'm sorry to be unsympathetic, but it was the banks which (without any credible dispute) brought us down.

The 'handful' of people in Northern Rock clearly dominated the bank's activities.

TruckerT

Well, let's not let the facts get in the way of your prejudices, eh?

"We" didn't bring anything down. For years the economy was lifted in large part because of the money that the banks were brought to the UK (and which many of us continue to do). It's now dropped back to where it was a handful of years ago.

Anyway, if you are genuinely interested in a perspective from a guy on the inside, I'm happy to provide it, but I've no need for, or interest in justifying anything to you, and I really don't need anyone's sympathy. Business is still very good, and I'm still happy to be bringing in good profits to the country.

TruckerT

John1993 wrote: »

Well, let's not let the facts get in the way of your prejudices, eh?

"We" didn't bring anything down. For years the economy was lifted in large part because of the money that the banks were brought to the UK (and which many of us continue to do). It's now dropped back to where it was a handful of years ago.

Anyway, if you are genuinely interested in a perspective from a guy on the inside, I'm happy to provide it, but I've no need for, or interest in justifying anything to you, and I really don't need anyone's sympathy. Business is still very good, and I'm still happy to be bringing in good profits to the country.

OK.

TruckerT

John1993_2

TruckerT wrote: »

They didn't much care - they were chasing the bonus.

TruckerT

I've always made my money by looking after the customer's interest (it's why they call me back rather than the guy over the street), rather than by "chasing the bonus", but, again, why listen to the view of someone who actually does the job, rather than your preconceptions.

May I ask, why would you think that we just chase bonuses? Where do these sort of ideas come from? It can't be from actual knowledge.

TruckerT

John1993 wrote: »

I've always made my money by looking after the customer's interest (it's why they call me back rather than the guy over the street), rather than by "chasing the bonus", but, again, why listen to the view of someone who actually does the job, rather than your preconceptions.

May I ask, why would you think that we just chase bonuses? Where do these sort of ideas come from? It can't be from actual knowledge.

It must be the Meedja then!

TruckerT

TruckerT

John1993 wrote: »

Business is still very good, and I'm still happy to be bringing in good profits to the country.

I am relieved that your business is still good - how much of the profits do you cream off before releasing the dregs to 'the country'?

TruckerT

CLAPTON

John1993 wrote: »

I don't know if you are aware of how risk is assessed and allowed in investment banking, but it's very, very far from cavalier. Traders have strict limits on how much they can take on, monitored daily, and management get very upset if the limits are breached. It nearl always leads to disciplinary matters.

I've traded in big name banks for a great many years, trough all manner of crises, and just don't recognize the categorization of what most of us do as reckless.

If we take Northern Rock as an example, it was probably only a handful of people there who decided to try to increase profitability by lending long-term and covering it in the short-term cash markets. With hindsight it was foolish, but was it really criminal? Do you think that anyone doing it knew it would end in disaster but just went ahead?

People who'd never dream of generalizing about other groups have seemed very keen to do so about people working in banks in recent years. I just wish that the criticism was at least informed.

I didn't realise that Northern Rock was an investment bank.

All normal retail banks lend long and borrow short: they are doing that today.

grizzly1911

John1993 wrote: »

I've always made my money by looking after the customer's interest (it's why they call me back rather than the guy over the street), rather than by "chasing the bonus", but, again, why listen to the view of someone who actually does the job, rather than your preconceptions.

May I ask, why would you think that we just chase bonuses? Where do these sort of ideas come from? It can't be from actual knowledge.

So the targets, both financial and product, that you are expected to achieve to drive your bonus, have no bearing on your how you do your job?

What happens if you don't meet those targets?

ILW

antrobus wrote: »

If by that you mean that some of the lending that was routed through offshore special purpose vehicles was bundled up and resold in such an opaque manner that it obscured the fact that the underlying lending wasn't what people thought it was then, yes.

But that would be the point; it's never a problem lending people money if they pay it back. The problems always arise when they don't.

That is true, but I believe RBS for example got to a point where they were holding so little (real) capital against lending, that a default rate of less than 0.5% could bring them down.