Food for thought on bank fines and tears
This piece in the Financial Times about the tearful apology from Australia cricket skipper Steve Smith is very entertaining. There are numerous executives in the world of finance – and beyond – who could learn a thing or two from Smith about sincerity.
Now we all know there are legal reasons we never see CEOs offer weeping apologies, but I think those legal reasons are tied in a funny way to today’s news of Barclays agreeing to pay a $2 billion fine for mortgage-backed securities misdeeds.
You see, I am old enough to remember when a $1 billion fine was a big deal for a bank. Now, I hardly notice unless the fine is up around $5 billion because multi-billion dollar fines are just the cost of doing business these days. If you don’t believe me, then go ahead and name the last bank CEO who lost his job because his bank had to pay a mammoth fine. I’ll wait.
While you keep thinking … I want to play a little game.
Let’s pretend bank CEOs had no legal reason to refrain from tearful apologies. And let’s also pretend those same CEOs had some serious financial skin in the game when it comes to multi-billion dollar fines. In a game of money versus pride, at what price would a bank CEO rather see his firm pay a big fine than have to offer a tearful, public apology? $1 billion? $3 billion? $5 billion?
And which bank CEO do you think would let his firm rack up the biggest fines to avoid having to get weepy? Better yet, which bank CEO would always be willing to weep for the team?
Trust issues for banks
The 2018 Edelman Trust Barometer: Financial Services was released today and the results are, well, not good for bankers.
The good news for an online media company like SmartBrief is that when asked, “Which source do you trust the most for financial information and advice?” Respondents in 15 out 28 markets around the world said they trust a website or newsletter from a financial services company more than they trust an employee of that company.
So for all you firms out there looking for someone to create a trustworthy newsletter for your clients, you know who to contact!
On the other hand
In this story on the gender gap in pay in England, banks look pretty good.
The elephant in the chat room
This is a peculiar story about Ekaterina Korshunova, a London banker who won a court case seeking compensation for the circumstances surrounding her firing. One of those circumstances was how she criticized her boss at Eiger Securities after he pretended he was her in a chat room and proceeded to make trades.
The story doesn’t mention anything about what happened to her boss for, you know … pretending he was her and proceeding to make trades!
The cherry on top is how one of the transgressions Eiger noted in the case about Korshunova’s conduct was how she changed her Bloomberg terminal password and turned off her computer screen after she learned she was being suspended.
I mean, if your boss is going into your work station and pretending he is you so he can execute trades, it seems like changing your password is the most responsible thing you can do, not “gross misconduct.”
It is also kinda funny that the whole case, which lasted 3-4 years, was over a whopping 16,800 pounds; of which, Korshunova only received 6,500 pounds. That’s a lot of lawyering for not a lot of pounds.
Thanks a lot Jeff!
This is not going to end well for GE.
Thanks a lot Donald!
Bloomberg’s Barry Ritholtz makes a good point here on market volatility:
“Let’s try a little thought experiment: Imagine you had a little too much to drink on New Year’s Eve, and went to sleep it off for 12 weeks. You woke up today, and the first thing you did was log onto your brokerage account. You look at your balance -- U.S., Europe and Japan down slightly, emerging markets up a little, and you might assume nothing much happened in the first quarter.
But to those who were awake the entire quarter, it sure felt worse than that.”
But still, did it have to feel so painful?