How The Banks Ignored The Lessons of The Crash

From there it was a small step to the notion that we can fix finance by getting rid of the “jerks”, as the plain speaking former Barclays CEO Bob Diamond put it. When Diamond was forced to resign in July 2012 over a scandal involving interest rate rigging by his traders, his successor, Antony Jenkins, also promised to focus on changing the culture. And so the same banks that brought us the mess of 2008 eagerly embraced the need for cultural change – which alone should arouse our suspicions. If there is one recurring theme in the many conversations I had with City insiders, it was the need for structural rather than cultural change; not so much different bankers, but a different system.

“Sometimes I feel as if finance has reacted to the crisis the way a motorist might after a near-accident,” said the City veteran at a small credit rating agency whose wife had almost chucked his phone into a lake at the height of the panic. “There is the adrenaline surge directly after the lucky escape, followed by the huge shock when you realise what could have happened. But as the journey continues and the scene recedes in the rear-view mirror, you tell yourself: maybe it wasn’t that bad. The memory of your panic fades, and you even begin to misremember what happened. Was it really that bad?”

He was a soft-spoken man, the sort to send a text message if he is going to be five minutes late to a meeting. But now he was really angry: “If you had told people at the height of the crisis that years later we’d have had no fundamental changes, nobody would have believed you. Such was the panic and fear. But here we are. It’s back to business as usual. We went from ‘We nearly died from this’ to ‘We survived this’.”

More from here. Hat tip to Barry Ritholtz.

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