Now that banks are being forced back to their traditional model of being dull institutions, those chasers after excitement who have been shown the door might like to consider some career options. I rather like Matthew Lynn’s list of suggested new ideas.
On a serious note, it is one thing to embrace risk-taking as a virtue of entrepreneurship, so long as the persons taking the risks carry responsibility for the bust. The problem with the investment banks, such as now-defunct Lehman Brothers and Bear Stearns, is that seldom happens. If the “Masters of the Universe” really do crave the high-wire, much better that they do so with money not given to them by the taxpayer.
On a separate but related point about state ownership of banks, one issue that has not yet been much discussed is that of political and business corruption. Under “public” ownership, what will count will be what Ayn Rand called “the politics of pull”: the ability of governments to put their toadies onto bank boards to ensure that favoured groups get their loans and other benefits, while enriching those with the right connections. We saw that in countries like France, state-controlled banks such as Credit Lyonnais became engines of corruption on a huge scale. If ever there was an issue for enterprising journalists to go after, it is this one. They may probably do so once they have become bored describing Gordon “off balance sheet” Brown as some sort of economic superman.
“On a separate but related point about state ownership of banks, one issue that has not yet been much discussed is that of political and business corruption.”
Absolutely. Yet what is discussed even less is the more basic monstrosity that is state ownership of currency..
Sticking to the topic however – the corruption you mention is surely the point of nationalizing the banks, not simply an undesirable or unforeseen consequence. Perhaps the term ‘corruption’ is a bit too light to really do the job here..
Where are the enterprising journalists?
As far as I can see most of them on TV and in the major newspapers are happy just to act as mouthpieces for their important contacts, whether those contacts are institutional or individual.
So I don’t think those journalists will go after this story at all.
It’ll be left to the interweb.
They should start by realizing “masters of the universe” and “masters of hubris” aren’t the same thing.