Friday, April 17, 2015

Do bankers remain eternally money motivated?

Does Money alone Matter?

1. Dictionary.com says  that contentment is a the state of being contented (it is about) satisfaction; ease of mind. Wikipedia says that contentment is the acknowledgement and satisfaction of reaching  capacity.

Contentment emanates from people, objects and situations in the world. Contentment is a state where the mind does not want anything else from the world. This state appears ephemeral;  contentment seems to be triggered by something that is temporary and finite at least in the case of bankers.  

So people who served with fairly good pay packets and are policy makers retire. At retirement they appear contented with their long and arduous jobs. They leave desks happy: until the next tempting offer from a private finance company / hedge fund / bank comes.

Senior  retirees who joined or are likely to join big investment firms ostensibly for  attractive monetary compensation reportedly confirm that contentment is only over the short term. (Alan Greenspan- Paulson & Company, PIMCO and Deutsche Bank; Paul Volcker-Wolfensohn & Co.; Jeremy Stein- BlueMountain Capital; Timothy Geithner, - Warburg Pincus; Ben Bernanke  -Citadel?.)

2. Instances where there bankers have  let the customers and regulators down :

Case 1) London Inter-Bank Offered Rate (LIBOR) was a yardstick which was developed by the regulators and the Bank of England. The Libor priced the loans made to mortgages and commercial loans. Normally around midday every day the bank tried  to set a fair assessment of the interest rates by obtaining quotes from some big banks, some medium-sized banks and some small banks. This was under the approval of the Bank of England. The bankers then added up the numbers and divided by the number of participants (ranging from 7 to 14) and that was Libor. The Libor rate is the benchmark for loans, mortgages and products in the financial world which run into trillions of dollars. Barclays fixed these rates at various centres, in various deals and through a host of traders.  Barclays managers lied.

(Case 2) HSBC paid a $ 1.9 billion to US authorities for not adhering to regulations on money laundering. HSBC violated sanctions in bank with violating sanctions laws by doing business with customers in Iran, Libya, Sudan, Burma and Cuba. HSBC   has reportedly been helping customers avoid taxes.

(Case 3) Lloyds Bank sold insurance products to people who did not need them or would be ineligible for them.

(Case 4) Deutsche Bank's former CEOs are reportedly accused of lying and attempted fraud and lied in testimony to German judicial authorities.

(Case 5) Bank of England has invited investigations by Serious Fraud Office in regard to liquidity auctions it made in 2007 - 2008.

(Case 6) Commonwealth Bank of Australia's   two senior IT executives were involved in bribery and fraud. These men, allegedly amassed at least $US1.5 million in kickbacks in return for awarding   technology contracts to a   cloud services company.

 Without any risk or responsibility


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