New York University Professor Nouriel Roubini discusses “greedy” bankers, the euro-zone crisis and risks facing the global economy in 2013.
“Nothing has changed since the financial crisis. The incentives of the banks is to cheat – doing things that are either illegal or immoral. The only way to avoid that is to break up these financial supermarkets. There are no chinese walls and [there are] massive conflicts of interest.” Here is a direct link.
In the wake of the bank rate-rigging scandal, Bob Diamond, Barclays chief executive, announced his resignation from the post with immediate effect, on Tuesday.
The first step to fixing the financial system is to be brutally honest about exactly how widespread and condoned the corruption has been and remains today. The time for politely dancing around the truth is long gone.
Following the systemic fraud of the tech wreck evident in high profile bust-ups like Enron, Tyco, Worldcom et. al, the US tried to bring financial accountability to American corporate executives via the Sarbanes-Oxley Act of 2002 (called the Public Company Accounting Reform and Investor Protection Act’ (in the Senate) and ‘Corporate and Auditing Accountability and Responsibility Act’ (in the House). London, England declined to enact any reciprocal legislation and indeed British politicians openly courted corporate felons, attracting them to London with the promise of lax legislation. Many rats fled America and swarmed to the “business friendly” climate of London where they have been able to operate ever since nearly completely unfettered and unchecked. This is the very reason that London has, over the past few years, become the largest financial center in the world.
We can either admit facts, prosecute those who have committed fraud and criminal acts, sue those who have failed in their duty of care, and rout out the core of this insipid status quo or…we can continue to pretend and extend undue privilege and tax breaks to corrupt franchises and their leaders while continuing to suffer through an endless global economic malaise. The choice is ours to make. Here is a direct link.
The world is reacting in “shock” at the LIBOR-fixing flap at Barclays. The truth is that this manipulation has been happening for years. I first heard stories about interest rate fixing as far back as 2007. Hell the world’s central banks have been doing it unabashedly now for a couple of decades. Bankers have been rigging markets and taking unfair advantage of clients, countries and taxpayers forever. Rarely has there been a period as prolific as the last 15 years however, when technology and globalization have aided and abetted a revolving door between government, regulators and finance that has richly rewarded its key participants while widely tolerated and celebrated by naive masses. If society is truly ready to face facts now and root out this evil, then there is an endless body of evidence that will confirm the cesspool culture that is global investment banks.
The problem is that they have not acted in a vacuum. It is both credit(crack)-dealers and credit-addicts that have caused our present carnage. When everyone is “on the take”, no one is protecting vital principles and integrity and ethics descend into anarchy. Pretty much where we stand today. No one should be surprised to hear the gory details. The whole culture of banks must be up for a complete overhaul and hand in hand with this process, the proceeds of crime must be taken back from the principals and executives that have profited from it.
JPMorgan Chase was downgraded to “hold” by Meredith Whitney, founder/CEO of the Meredith Whitney Advisory Group. “This was the only large cap bank stock we had recommended, and now it is more in line with our negative stance on the group,” she says. Here is a direct link.
