The Margin Call on Ethics

There is an Atlantic article entitled, “The New York Fed to Banks: Clean Up Wall Street” that I think brings us up-to-date with the issue of ethics in the financial industry,

This past week, the president of the New York Federal Reserve William Dudley hosted a closed-door conference with some of the world’s biggest banks to encourage them to do more to clean up bad behavior in the financial sector. Dudley warned that not only has public trust eroded in light of various scandals, but that the unethical culture within banks is a possible source of instability.

“The banking scandals that followed the financial crisis are evidence that something fundamental is wrong,” said Dudley in his opening remarks. “I would encourage each of you to consider not just specific examples of misconduct, but the patterns within them that point to underlying causes. I suspect we will see a strong overlap with those factors that contributed to the financial crisis. I think your focus should be less on the search for bad apples and more on how to improve the apple barrels.

(Speaking of apple barrels…) And Christine Largarde saying,

So if the financial industry is to put people before profits, and society before shareholders, we need to see a change in the values and behavior of individuals themselves. We need a culture that holds individuals accountable for the consequences of their behavior—good and bad.

Christine Largarde may be right, but it is not as simple as that. Remember the movie “Margin Call”?

In it, Jeremy Irons as the CEO John Tuld said, “If you’re first out of the door, it’s not called panicking”.

Here is another quote from the movie,

Jesus, Seth. Listen, if you really wanna do this with your life you have to believe you’re necessary and you are. People wanna live like this in their cars and big fuckin’ houses they can’t even pay for, then you’re necessary. The only reason that they all get to continue living like kings is cause we got our fingers on the scales in their favor. I take my hand off and then the whole world gets really fuckin’ fair really fuckin’ quickly and nobody actually wants that. They say they do but they don’t. They want what we have to give them but they also wanna, you know, play innocent and pretend they have no idea where it came from.

Well, that’s more hypocrisy than I’m willing to swallow, so fuck em. Fuck normal people. You know, the funny thing is, tomorrow if all of this goes tits up they’re gonna crucify us for being too reckless but if we’re wrong, and everything gets back on track? Well then, the same people are gonna laugh till they piss their pants cause we’re gonna all look like the biggest pussies God ever let through the door.

And not everyone is like this:

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