While the title of the book makes you think “teen angst” and the book’s choice of cover image that makes you think “Jack the Ripper”, you’d be surprised to learn that this is a book about the Securities Exchange Commission (yes, that’s right – the not-so-dreaded SEC). The book follows the mildly eccentric tale of the mildly eccentric Harry Markopolos, briefly and intermittently describing his journey through life, but getting quickly into the meat of how he set his sights on Bernie Madoff.
Just reading Oyama’s table of contents we get a clear run-down of the key issues in the current financial crisis, from its seeds (the pre-crisis summer of 2007, 2007, and the full-fledged crisis in mid-late 2008), an overview of its elements, reactions by governments and regulators, issues that set this crisis apart from others, reform of the risk management regime for banks, the Japanese and Asian perspective to the financial crisis, and a new conclusion that highlights significant post-crisis risk management issues.
Prudential’s purchase of AIA is being packaged like a marriage of equals; it is anything but.
No one talks about green shoots any more, they just assume that the worst is behind them. Assumptions are always dangerous, all the more so when billions are involved.
And so it was with great interest that we got to finally meet Piyush Gupta in his new role as CEO of DBS on February 5th, where he presided over the group’s 2009 results meeting. But more than the results, which he had little influence over, we were more interested to find out what kind of leader he would be. Before he retired as CEO, Jackson Tai told us…
When five banks failed stress tests, the new central bank governor stepped in and fired the CEOs of all five banks, at the same time recapitalising them with $2.4 billion and effectively taking control of the institutions. The country: Nigeria. The time: now.
The announcement this morning that ANZ was buying RBS’ business in six countries was no surprise to anyone who had been following the story -except maybe for the price: at $550 million, ANZ is paying a much smaller amount than the $980 million that had been mentioned in recent press reports. Now the hard work begins.
Gordon Brown has publicly supported a “half now, half later” bonus policy, similar to UBS’ “held in escrow” concept. I don’t see this as any kind of a solution, it is more of a perverse magnifier of the problem, for the simple reason that if a greedy and morally vacant banker wanted to achieve a pre-crisis level of bonus payout that person would take double the risks taken before the crisis, making booms shorter and busts longer.
Confidence. Trust. Sentiment. Shifts in these intangible qualities were probably more of a root cause than anything else in the recent financial crisis. Until now, no serious analysis has been made of the nature of confidence in banking, and its effects on the culture of the organisations themselves. But some interesting studies are finally beginning to surface.
Taiwan may be protecting its state-owned banks in order to preserve the status quo; Taiwanese view banking as national infrastructure and expect it to be free, much to the chagrin of banks without state backing that need a steady stream of fees to make their businesses sustainable. The Taiwanese take a dim view of privately-owned banks that charge fees, flood the market with unsecured lending products and sell investment products made of pixie dust. Perhaps there is a natural limit to growth for these institutions until society can change.
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