Financial fraud expert Bill Black discussed the HSBC case on Wharton Business radio today. You can listen to an audio link of the discussion here.
William K. Black, a professor of economics and law at the University of Missouri-Kansas City noted that “there is hope” for regulators to clean up the banking industry. He cited the concept of “Gresham’s Dynamic,” which economist and Nobel laureate George Akerloff propounded in a 1970 paper. “The concept is that when you gain a competitive advantage by cheating, then markets will become perverse and bad ethics will drive good ethics out of the marketplace,” he said. “We can block those dynamics. That’s what our function is as competent regulators. We can recreate the rule of law so that honest bankers can prevail.”
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