Which, of course, is bullshit. Think about it for a few seconds. Let's say you're a investment banker. You're working on Wall Street. You get bonuses that depend on your doing deals. So you set up some sort of pool of collateralized debt obligations and you market it at as triple-A rated security. The "securities" sell to investors around the world and you collect your bonus.
This is the key: It has zero effect on your bonus. Your bank doesn't care about the fact that you just marketed and sold securities that were nothing other than repackaged dog shit. The deal was done, the bank collected huge fees from putting the securities together and you got your cut of that. Provided that the bank wasn't stupid enough to believe its own hype and didn't buy any of the Love Canal Mortgage Securities you just sold to the patsies, there is no harm to the bank.
This point cannot be driven home hard enough: The bankers were paid to do the deals, they were not paid based on the quality of the products. Nothing has been done to prevent them from marketing more of those shitty "securities", their buddies in the ratings companies will continue to rate them highly, suckers will continue to buy them and the bankers will continue to
We have learned nothing from the financial collapse of 2008.
We are so screwed.
3 comments:
A-women!
(Especially.)
S
We are so screwed.
British Bankers' Association here - the apologists you mention. We're not going to ask you to change your mind, or even not to be angry. I don't know how angry you can get.
We didn't say "bonuses didn't cause the crunch" - that was the guy at the Independent who wrote the headline. Headlines are there to get people reading, so he did his job, but it isn't quite what we said. We said there were plenty of other significant causes we are in danger of ignoring: international standards weren't resilient enough, complex products were incorrectly rated, regulators both in the UK and elsewhere did not catch the problems, and economies were grown on debt using cheap credit from the East.
We're not dodging our share of the blame. In the UK our major banks were the first to sign up (voluntarily) to the bonus curbs announced at last month's G20. We are trying to sort this. But meanwhile we can't blame you for being angry. Some of the recent headlines make us angry too.
BBA, I do appreciate your taking the time to drop by and give your point of view.
There is, however, an inevitable fork in the road for most of us: What is legally permissible and what is moral and ethical. I firmly believe that everyone knew, at some level, that what they were doing was indefensible. But it appeared to be legal and everyone else was making a ton of money from it.
I cannot say with certainty that I would have declined a similar opportunity. I'd like to think I would, but making a lot of money soothes a lot of qualms.
Still, one does not have to actually pull the trigger in order to be tarred with the crime. There are a lot of culpable people in the collapse and the bankers were near the core.
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