World Economic Forum

January 28, 2010 at 9:29 pm Leave a comment

Bankers and government leaders are meeting now at the World Economic Forum in Davos, Switzerland to discuss regulatory reforms to banking practices that led to the recent economic meltdown and a subsequent world wide public outrage at how banks, particularly in the US, Britain, Germany and France, almost destroyed the world economic system in their orgy of greed and extremely poor judgements. The bankers are there in force to try to head off proposed government regulations that would govern how they trade, tax their bonuses and have the banks organized such that single banks cannot get so big as to threaten economic disaster if they fail. The bankers are fighting these proposed regulations tooth and nail. “We will all be losers if we don’t have an efficient market in place”, said Joseph Ackerman, the chair of Deutsche Bank, implying present banking structures aren’t that bad. When the banks were allowed to operate basically as they wished, incredibly short sighted (read short term profit driven actions with no thought given to what the consequences would be as a result of their rush for profits through trading in investment vehicles that were toxic to say the least) actions governed only by how much money they could make were the preferred actions of the day. The pendulum will probably now swing in the other direction and regulations, perhaps regulations that are too harsh in reaction to the damage the banks did to the world economy and all the suffering they caused to so many people, will be enacted by governments to protect themselves from the past capricious behaviour of the banks.
Underlying this sorry economic situation is a dearth of ethical awareness and practice by the banks. They violated trust, treated people not as human beings but as mere things on their accounting ledgers to be treated as after thoughts, if at all, to their drive for profit and did not live up to their fiduciary duty to their clients. In short, they betrayed everyone who counted upon them to display even a modicum of responsibility and accountability that society had expected of them. A profound lack of character was demonstrated by many in the banking industry leading up to and immediately after the economic crisis. I think, rather than arrive in Davos to protect themselves and their privileges as best they can against the governments who will curb their freedom of action to protect their citizens from further destructive bank practices, the bankers involved should do a reality check on their own characters and the flawed ethical stances they showed to the world that led them down their destructive path to chase profits and bonuses in such a destructive manner. No constructive change will really take place through regulations unless the bankers themselves show a greater ethical self awareness and an ethical corporate awareness. No ethical change means no real change. Kind of like putting perfume on a pig….you still have a pig only, on the surface, it smells a little better.

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Corporations and Politics High Frequency Trading

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