Can you imagine a major industry which suffers a near death experience, angers its entire customer base—wholesale and retail, domestic and international—and yet refuses to publicly apologise and adopt a plan of action that commits the industry to not repeating the mistakes of the past. That is where the banking industry is at right now.
This lack of decisive action on the part of the industry’s leadership will do lasting damage to not only the industry but also to its as yet unforgiving customers and the global economy. Part of the problem is that the industry does not appear to even realise that it is in a crisis—one which has been brought about by a complete loss of public faith in its activities. That is a tragedy. Continue reading
Posted in Banking, Business, Politics
Tagged Banks, Basell III, Business, Capital, Crisis Management, Customers, Financial Crisis, Government, Leadership, Legislation, Management, media, people, politics, Regulation
This is the second in a three-part series of articles on the financial crisis. Part I can be found at this link.
The Real Reason for the Subprime Crisis and Bank Failures
The subprime crisis was not really about management, risks, controls and regulations—these were all after the fact. The crisis was a direct result of human failings which stemmed from a poor system of values. In order to understand this we have to look at and examine the crisis within the context of the industry’s human ecosystem. The following analysis does precisely that.
Posted in Banking
Tagged Banks, Behavior, Clearing The Bull, Customers, Financial Crisis, Human, Human Assets, Junk Bonds, LDC Debt, Legislation, Mission, people, Plato, Predatory Lending, Regulation, Subprime Crisis, Suppliers, Sustainable, Values
We can never legislate or regulate our way to sustainable banking—the industry needs to adopt a new strategic business model
Déjà vu All Over Again
“They came on in the same old way and we sent then back in the same old way”.
They were the words the Duke of Wellington used to describe the repeated and futile attempts by Napoleon’s Grand Armée to break through the British defenses at Waterloo.
They can equally be used to describe the current prescriptions for the subprime crisis.
We remain mired in the unenviable position where those who know about banking are firmly wedded to the same old solutions, while those who don’t know about banking i.e. some in the mass media and certain politicians, resort to populist rhetoric. Sadly, the debate on the subprime crisis has generated more heat than light.
It is time for something different. However, before we move forward with a new prescription we need to better define the problem.
Posted in Banking
Tagged Audit, Bank of England, banking, Clearing The Bull, Credit, Dick Fuld, Federal Reserve, Finance, Financial Crisis, Fred Goodwin, FSA, Investment Banking, Junk Bonds, LDC Debt, Legislation, Regulations, Risk, Risk Management, SEC, SOX, Subprime
The following interview with Jonathan Ledwidge on the newly published book, Clearing The Bull, was posted in the Cass Business School Alumni magazine.
Posted in People
Tagged Banks, Cass, Clearing The Bull, Crisis, Customers, Financial Crisis, Governance, Government, Human Assets, Internal Controls, Legislation, people, Regulations, Subprime, Sustainability, Values