Bush en Cheney spugen op bankiers

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Ha ha, dat had je gedacht ;)

Integendeel, Bush heeft immers ook gezegd dat 'dit zijn mensen waren'
(tijdens feestje in film van Michael Moore).

Maar de Ieren zijn wel flink kwaad op hun bankiers. Het blijkt dat
sommigen van hen forse leningen aan zichzelf hebben gegegeven (totaal
€450M), wellicht onder het motto ''wie appels vaart, appels eet?'

De zogenaamde leider van de bank zag zelfs kans dit acht jaar lang te
verbergen, door aan het eind van het jaar de lening voor korte duur onder
te brengen bij een andere bank (zodat het niet in de jaarlijkse balans
hoefde te worden opgenomen).
De externe accountant en de interne compliance officer waren zeker op
langdurige vakantie?

Groet / Cees

http://www.businessandleadership.com/news/article/12443/leadership/time-for-fresh-faces

Time for fresh faces

17.02.2009
We cannot escape the fact that senior financial services directors failed
in their roles, argues Brendan Keenan, who says it is time for a fresh
start at the top.

Economics, famously, is known as the dismal science. Of late, economic
commentators have become the butt of both mockery and criticism for their
supposed excessive pessimism.

Perhaps they (or should it be we?) started too soon. As the boy who cried
wolf found out, warnings should be strictly rationed and timed carefully
for maximum effect. Whatever the reason, the undoubtedly dismal warnings
about the state of the economy do not seem to be having much effect, or at
least not the effects that the messengers would like.

Take the banking crisis. Share prices have fallen to practically nothing,
and getting credit is like picking up mercury with a fork. Yet these have
received much less attention than the concealment of loans by the former
Anglo Irish Bank chairman.

It is true that the media needs a face, and Sean FitzPatrick’s actions
could serve very well for a paradigm of the general banking disaster. It
would be a pity, however, if the unfortunate people who have lost their
life savings in the supposed safety of bank shares were left with the
impression that it was the result of wrongdoing.

It was, of course, the result of doing wrong things. That is the
wrongdoing of folly, which periodically overwhelms bankers if they are not
restrained from the temptations of cheap credit. So, we must add the
wrongdoing of those who did not restrain them, starting not with the Irish
Financial Regulator, but with the Federal Reserve, the central bank of the
US. Had the latter done its job properly, the former could have cruised
along fairly successfully on the version of autopilot it, and its Central
Bank predecessor, nearly always employed.

This kind of wrong cannot be fixed by changing the pilots, either in
Washington or Dublin. It creates a new, blighted landscape that must be
painfully restored, whether or not those responsible are replaced.

Whistling past the graveyard

In my opinion though, they should be replaced. The heads of the guaranteed
lenders here all failed spectacularly in their jobs. It is astonishing
that only one has so far announced his departure, while one has been
forced out for reasons other than bad banking. It is even more astonishing
that the former announced his early retirement with expressions of mutual
admiration and satisfaction all round. In my view, this kind of whistling
past the graveyard is doing nothing for the reputation of the banks, and
is adding to the widespread lack of confidence that the people running the
banks are capable.

That may be a bit unfair, but it is not unfair to say that foolish lending
has been followed by foolish posturing. Behind it seems to lie a
conviction that they could not have done things much differently at the
time, and are therefore being blamed too harshly.

It is true that any chief executive who applied sound banking standards
after 2004 would probably have lost his job some time ago. That was the
fate of anyone who refused to join in a mania for easy money.

But he or she would have a good pension and an enormous profit on their
share options — since they would have known to sell them, rather than
borrowing more money against them. And they would be basking in the glow
of having been proved right, while the others join that sorry ship of
fools, sailing through history — from the Dutch tulip madness to the
dotcom frenzy.

So, even if they don’t think they ought to go, why have they not been
pushed? One is told that the bosses are still in place for fear that mass
departures would further erode confidence in the banks, and also that it
might be difficult to replace them.

These seem very strange assertions. What would a GAA county manager not
give for that kind of attitude to not only losing all his games, but
accidentally setting fire to the stand as well?

One would need some persuading about the lack of alternatives, too. A
bank, or any other large organisation, that does not have three or four
potential chief executives in its senior management ranks is in trouble
anyway.

The myth of the CEO

The idea that CEOs in general are remarkable people, worthy of enormous
earnings, is one of the great self-serving myths of our times. Those who
created the companies they work for may have a claim to special status,
but most top managers could be satisfactorily replaced by any number of
candidates. They have to be in the end, after all.

As for damaging confidence, the lack of change in the top echelons may be
doing more serious damage than that. People are likely to draw one of two
conclusions from it: that the banks have not faced up to crisis
confronting them; or that things are not as bad as is made out.

There may be some truth in the first assertion, but there is none in the
second. But the lack of repentance, or even acceptance of responsibility,
may partly explain why people seem not to grasp how much effort and money
will be required to restore the banks to their vital role in the economy.

If they do not grasp it, they are unlikely to agree to putting their money
into whatever various schemes are designed to achieve it. Not
unreasonably, questions are being asked as to why banks — or, even worse,
bankers — should be bailed out with public money while the public
themselves lose their jobs, or see their pay cut, or services curtailed.

New beginnings

As for the banks, there is the well-established fact that, in any
organisation, it is easier for a newcomer to say that things have been
left in a terrible mess and to start clearing them up. He, or she, may
even attribute other messes to the failures of the departed CEO. However
unfair that may be, it allows them all to be thrown in the bin marked ‘The
Past’, and then everyone can move on.

So, the less any new bank chief had to do with property lending, the
better. The banks and the Government will have to work closely together to
deal with the consequences of that lending in ways that do not overwhelm
the banking system itself. In this country, the Government has been
elected and must carry out its mandate, but it is my view that the banks
need a new start.

by Brendan Keenan

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