tag:blogger.com,1999:blog-4073991368963140015.post7454775449685477168..comments2023-11-05T12:18:27.222+00:00Comments on Labour And Capital: Stupid bankersTom Powdrillhttp://www.blogger.com/profile/05511483398745094803noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4073991368963140015.post-16988825119558964972009-07-17T16:58:10.405+00:002009-07-17T16:58:10.405+00:00It does make you wonder to what extent these types...It does make you wonder to what extent these types of reports are seen as lightning rods to disperse public pressure.<br /><br />By pitching the recommendations just ahead of where things are heading anyway a review can appear to be pushing the industry (and thus create a few grumpy headlines the give it a bit of legitimacy) without really changing anythingTom Powdrillhttps://www.blogger.com/profile/05511483398745094803noreply@blogger.comtag:blogger.com,1999:blog-4073991368963140015.post-5899698808929993592009-07-17T12:05:30.061+00:002009-07-17T12:05:30.061+00:00Have drilled down into Chapt 6 - Governance of Ris...Have drilled down into Chapt 6 - Governance of Risk, which is what I know about.<br /><br />It's very thin & there's literally nothing of substance that wasn't best practice 15 years ago: I can produce the textbooks to prove it.<br /><br />Given the (correct) scene-setting in 6.1: "<i>financial risks are the principal risks of any BOFI business</i>", he can't then go on to allow the NEDs to be amateurs:<br /><br />"<i>The NEDs on the [risk] committee cannot be expected to be able to replicate the industry expertise of the executive team</i>"<br /><br />If that's the case they will be bamboozled every time.<br /><br />You gotta love "<i>there may be merit for the board risk committee in having an open and wide-ranging discussion without the sometimes dominating presence of the CEO</i>" !<br />(see also my <a href="http://cityunslicker.blogspot.com/2009/07/buck-stops.html" rel="nofollow">little anecdote</a> for how the world really operates)<br /><br />He favours publication of more risk metrics: why not just follow existing US practice ? and the penalties that attach to inadequate risk-reporting there, too !!<br /><br />Finally, I find this revealing:<br /><br />"<i>the social cost in the event of failure is likely to exceed the downside risk for shareholders, on recent experience by a very large margin</i>"<br /><br />this is only really true when retail banking / deposit-taking is allowed to be contaminated by 'investment' banking / proprietary trading etc. Obviously Walker is taking this as a given ...Nick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.com