It’s very helpful for UBS to have an individual trader to blame. It distances the bank from the event, and the individual can be pilloried as the rotten apple in a barrel of perfect Golden Delicious. The truth, as the ever-lengthening line of these disasters demonstrates, is that the banks encourage reckless behaviour. Nobody gets fired for making $2bn from a rogue trade that comes right. If his bet on black comes up, he gets a life-changing bonus. If it’s red, it’s not his money.
Oswald Gruebel, the man who, six months ago, was warning against excessive regulation , says he found the news “distressing”, but it’s not personal distress. That’s for the shareholders, left to pay the bill and contemplate their plunging investment. If Grubel is genuinely shocked, then he really hasn’t been paying attention. Where does he think the profits come from? The mundane businesses of fund management and private banking are far too dull to produce the sort of returns investment bankers demand.
Quelle: FT Alphaville
But the reality is, the brains of investment bankers by nature are not wired for "client-based" thinking. This is the reason why the Glass-Steagall Act, which kept investment banks and commercial banks separate, was originally passed back in 1933: it just defies common sense to have professional gamblers in charge of stewarding commercial bank accounts.Investment bankers do not see it as their jobs to tend to the dreary business of making sure Ma and Pa Main Street get their $8.03 in savings account interest every month. Nothing about traditional commercial banking – historically, the dullest of businesses, taking customer deposits and making conservative investments with them in search of a percentage point of profit here and there – turns them on.
In fact, investment bankers by nature have huge appetites for risk, and most of them take pride in being able to sleep at night even when their bets are going the wrong way. If you’re not a person who can doze through a two-hour foot massage while your client (which might be your own bank) is losing ten thousand dollars a minute on some exotic trade you’ve cooked up, then you won’t make it on today’s Wall Street.
Quelle: Rolling Stone
