Monthly Archives: July 2013

Banks Have Arrived At A Gazpacho Moment

A few years ago, I went to a reunion of my Cass Business School MBA class. Immediately on seeing me, one of my former classmates started laughing. I was, of course, puzzled and asked him what was so funny. He apologized for his outburst but confessed that, in the past several years, he had, on several different occasions, taken great pleasure in telling some of his friends a joke about me.

I will share that joke with you. Continue reading

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Outdated technology could lead to another crisis in banking

This blog has maintained that the lack of proper IT and systems is a major concern for the banking industry. Here is the proof, if indeed any was needed, from the pages of the FT.

Outdated technology could lead to another crisis in banking

The FT goes even further and suggests that the failure of such systems could lead to both a financial and social crisis.

This is why I have always believed that the most important response to the problems within the banking industry is not what governments and regulators can do but what bankers themselves can achieve. Governments and regulators should take heed. IT systems are a major source of risk within banks which no amount of legislation and regulation can remedy.

This is also another example of why focusing solely on the risk culture of banks is simply not good enough–as has been clearly demonstrated in the series of articles on the blog.

Jonathan Ledwidge is the author of the book Clearing The Bull, The Financial Crisis And Why Banks Need A Human Transformation (iUniverse).

Bank Risk Culture: An Alternative View On The Causes Of The Last Financial Crisis

The following is the sixth in a series of articles on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

A total meltdown in any system requires nothing less than a total rethink of the way forward.

Legislators and regulators have blamed the subprime financial crisis on a whole host of issues including derivatives, proprietary trading, deregulation, the collapse of Glass Steagall and the integration of retail and investment banking, as well as the overall failure of risk management and corporate governance. What we have learned so far in this series of articles is that the actual reasons are somewhat different as they relate to the overall culture of banking. Continue reading

Bank Risk Culture: Why Leadership At The Top Is Single Biggest Source Of Risk

The following is the fifth in a series of articles on bank risk culture. The previous articles can be accessed here or by clicking the HOME tab on the blog.

No discussion of risk and culture is complete without examining the role of leadership in defining both. This week’s article will demonstrate that poor leadership is the single biggest source of risk to an institution. It is also a source of risk which no amount of risk management or focus on risk culture can overcome. Continue reading