Barclays is not the problem

Barclays is a problem, no doubt. But it is not the problem. The problem is not a few cowboys, it’s the whole damn rodeo.

Speaking with a friend who’s worked on nuclear anti-proliferation strategy on Saturday, I was struck by the contrast he drew between approaches to and expectations surrounding government regulation in both areas.

Given nuclear technology’s tremendous potential for colossal harm it’s a no-brainer that stringent regulation, frequent spot-checks and the limitating of access to rigorously trained and qualified personnel are the rules of the road.

Moreover, ‘war-gaming’ of “tail” risks is mandatory and under constant review; even if things seem okay, all involved are hard-wired to understand the awesome responsibility not to screw up and to behave with prudence, restraint and care.

Planet Finance – as Niall Ferguson’s fine book rightly depicted the scale and other-worldly (i.e. ridiculous) sense of risk-assessment that characterizes this industry – by contrast? Restrain? Regulation? Bigger, faster, more is the only code they have.

Even now.

These guys don’t even know what’s on their own books. Mad? Not half as crazy as it not being illegal to maintain such books. Or as the remaining reality that you and me will bail them, again, when they crash again. And they will.

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  • Mister_Joe

    Great photo. “FIXED” rates. LMAO.

  • Mainland Ulsterman

    A very good point. My view is that investment bankers can only be brought down to earth by having the basis of their behaviour – their belief in their own brilliance – chipped away at.

    I used to work in the City for a few years in the 90s, not as a banker I hasten to add – and these f***ers really think they’re superbrains. Yet they’re often smarty-arse maths types who get on very well materially but have a psycho-cultural nuclear winter inside their heads. What they need is to be beset by a team of super-smart shrinks, cognitive scientists and humanities professors who can show them beyond doubt how delusion their view of life and human existence is. We can break them … well not me but others. But seriously I do think pressure from respected public figures will ultimately have an impact.

    But they need more than organic cultural change, they need a forcible shake-up too. For starters, how about making new entrants to investment banking do a fairly rigorous course in ethics and moral philosophy before they can practise?

  • Greenflag

    Ruarai & MU ,

    Well said but it will require more than just fixing the investment banks -it will also involve fixing the politicians of both left and right who have all failed miserably for the past decade or more in bringing these greedy lunatics to book. Also regulations are no use if the regulators fail to regulate as happened quite frequently in the Wall St meltdown.

    What was supposed to the free market in banking has turned out to be nothing other than a nod and a wink cartel among the biggest bankers on the planet with Barclays just being the first to come clean if such a term can even be used in the context of these wretches .

    Alas the three main British political parties are using these revelations NOT to institute far reaching and effective reform in regulatory procedures but instead to use this scandal to play political party one upmanship.

    Truly the interests of the British public have been pissed on by their elected politicians . And we can say the same for the Irish and American publics also:(

  • Mister_Joe

    Mainland Ulsterman,

    I can’t see that happening. A quicker solution would be to throw a bunch of them in jail as an example. The new entrants will catch on.

  • Mainland Ulsterman

    Jail would be good too 🙂 I think that’s what we all want.

  • Firstly, well done on finding that Ad. It was so funny, it almost made up for the miserable weather outside.

    I agree with Greenflag that the three main British political parties are using these revelations to play political party one upmanship. It is a reminder that political selfishness is as much to blame for the financial crisis as greed in the financial services industry.