How Deutsche Bank Made a $462M Loss Disappear

Post by eru » Fri, Jan 20, 2017, 9:50 PM UTC

iheartmemcache wrote: post #20

Cerium wrote: post #8

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The leaders need an incentive to ensure the law is followed.

How do you incentivize "produce less goods/generate less profit"[1]? That's a genuine question. We can barely de -incentivize flat-out criminal behavior. The line between malice and negligence is a tenuous at best. DA's feel lucky when they get a Grand Jury to indict which almost always results in a plea bargain being offered by the State, accepted by the indicted, and stamped on through by the Judge hearing the case…

Post by bradleyjg » Fri, Jan 20, 2017, 10:30 PM UTC

bogomipz wrote: post #9

mikeash wrote: post #5

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Companies don't want to police their own departments. This is how lots of modern companies deal with laws they don't like. They commit to obeying the law, tell everybody not to do anything illegal, but at the same time place requirements and expectations on the peons that force them to break the law. Then the peons get caught, they tell everybody how it's not their fault, they told everyone not to do that. The peons…

Wow I was downvoted for saying that management needs to be held accountable for criminality? The cycle repeats because there is no disincentive to stop it. How many people went to jail after the 2008 crisis? I think you could count them on one hand and still not use all you fingers. Nobody will go to jail for Wells Fargo fraud either.

Post by notgood » Fri, Jan 20, 2017, 11:01 PM UTC

abandonliberty wrote: post #22

nickff wrote: post #15

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The laws have gotten increasingly vague, and enforcement increasingly discretionary, so you never know which rule (if any) will be applied to what action. As such, no one can guarantee that any action is 'legal', so the risk team will always say there is a 1-10% chance of being fined/prosecuted. These enforcement actions have become an unavoidable cost of doing business.

>These enforcement actions have become an unavoidable cost of doing business. I don't know if we realize the gravity of that statement. The current environment rewards companies who take these sorts of actions. A bank that did not take these actions would be out-competed.

Post by jimnotgym » Fri, Jan 20, 2017, 11:38 PM UTC

jonwachob91 wrote: post #16

bogomipz wrote: post #4

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>"It's very hard to police a world wide distributed teams, who have many conflicting views, all of who get paid based on what they produce and don't have much long term incentive to see things any other way." Why is this hard for management to police their own departments? Other industries manage distributed teams just fine. I agree with your other points in that passage. The real issues is that there exists a cultur…

>If they are that good then more should be expected of them. They should be conducting independent audits - "trust by verify" or do some innovating in the area of compliance. Their M.O. is always to blame someone else, the buck never stops with them. Isn't that a little extreme? $500MM sounds like a butt ton of money to you and I, but Deutsche Bank has over $800B aum. To successfully audit $800B in assets a year he'd…

Post by neximo64 » Fri, Jan 20, 2017, 11:57 PM UTC

chollida1 wrote: post #2

I wrote my feelings about how Deutsche got into this mess here. I think its still a valid take on how things unraveled. https://news.ycombinator.com/item?id=13047056 > Essentially, the trade had little economic purpose—only an accounting one. Yep, that's one of the first things you learn about when you take any kind of trading course. At a lower level in the cash equity markets you have something similar with wash tr…