21–30 of 119 posts
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
Anecdotally, I rarely hear about China "fining" its egregious corporations, they go straight for the executives. America needs to get its spine back.
But yes, America needs to go for the brass more often.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
Now that I think of it, Taleb's suggested that banking should be a civil servant job. So, no financial engineering or bonuses, just boring paperwork.
In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. The idea is, of course, that if all the fancy derivatives blow up, it wouldn't take retail banking with it. I read recently that the UK government was thinking of dropping this, which seemed a bad idea.
Anecdotally, I rarely hear about China "fining" its egregious corporations, they go straight for the executives. America needs to get its spine back.
America is all about squeezing the individual for the few in power and wealth.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
Shareholders hold shares by choice, so they don't "have to" do anything.
If there are 22 years of records about which fines were paid, then the market must have already priced in this information a long time ago. Shareholders chose to pay that market price.
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
And this agency problem is partially caused by regulators and "good governance" rules who demand that the board is "independent" from the shareholders. But this makes them have less skin in the game and diminishing the effect of fines!
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
My other suggestion is that to practise banking, one needs a license, which can be revoked. Now that I think of it, Taleb's suggested that banking should be a civil servant job. So, no financial engineering or bonuses, just boring paperwork. In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. The idea is, of course, that if all the fancy derivati…
As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.
> shareholders have to carry the can Shareholders hold shares by choice, so they don't "have to" do anything. If there are 22 years of records about which fines were paid, then the market must have already priced in this information a long time ago. Shareholders chose to pay that market price.
That's not how pensions, ETFs, index funds or pretty much anything works.
Earlier quoted context omitted.
My other suggestion is that to practise banking, one needs a license, which can be revoked. Now that I think of it, Taleb's suggested that banking should be a civil servant job. So, no financial engineering or bonuses, just boring paperwork. In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. The idea is, of course, that if all the fancy derivati…
That is already case, it isn't formalized though. If you want to be a bank executive you must prove both theoretical and practical skills and management experience. That is already a steep hill. Also, any criminal record, especially related to banking or money makes it harder or outright impossible to qualify.