Today in the UK there was a governmental commission of inquiry into the banking debacle that led our economies to the brink of a total financial apocalypse.
For the first time, in public, our leading bankers were summoned to explain their actions and inactions to our elected representatives in the full unforgiving stare of the public. For the first time these so called Masters of the Universe volunteered that they were unreservedly sorry for their mistakes and injudicious decisions. It’s about time.
The Chief Executives also admitted that the bonus culture, which they led and profited from, is a flawed system. Everyone now seems to share the view that bonuses should be linked to results over the longer term, measured in years, rather than linked to single deals. I am relieved that the greedy bastards have admitted this, and now, feeling contrite, one supposes that these pigs at the public trough will return their own grossly inflated bonuses of the past?
What was not investigated in today’s question and answer session is the cause of the underlying problems, in order to prevent any recurrence. I believe I know what is at the root of the catastrophe and it is a more profound, albeit simpler thing to correct than the obvious greed culture.
When you look at the relative knowledge and experience of these former banking Chief Executives one factor stands out, and it is so clearly the key factor in the disaster that I am surprised I am the only journalist to write about it. These men were brought in from outside banking, and they had no idea what they were doing! This is so obvious that I’d better repeat my research finding, these men largely had NO experience in banking prior to running our biggest banks.
Would any of us hire someone with no experience to run a chain of supermarkets, would any of us hire someone to run a car manufacturer with no experience, would any of us hire someone to run anything without any experience?
Of course the answer is no. It clearly didn’t occur to the Boards of Directors, the personnel officers, the shareholders or the headhunters that the bloody banks needed someone who knew something about banking before they hired these incompetent apologists.
The reasons for hiring these Chief Executives was a history of perceived success elsewhere, usually garnered from their deal making entrepreneurship. These Chief Executives didn’t even have sufficient knowledge to be a bank cashier let alone run a bank.
The banks clearly deserved what happened to them, but we, the public, did not.
Tuesday, February 10, 2009
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