So what happened to the Investment Services Directive, Capital Adequacy, Basels I and II ? Why do we give these greedy buggers their one-way betting slips ?
Let’s be clear: banks know what they are doing. Whenever there are serious penalties on offer for ignoring risk – e.g. when preparing a prospectus for a flotation – they all know how to fill out the ‘Risks’ section, in elaborate and blood-chilling detail. Curiously enough, though, when it’s day-to-day business, largely conducted out of sight, suddenly their risk management expertise goes out the window: it’s all too complicated and … well, if we lose enough, they’ll bale us out.
Why do we indulge them ?