The Fat Cat Confessional
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Last year, the City witnessed the dramatic end of the Gilded Age, where both entitlement and corruption were the emblems of power. It’s time for reflection, and time for redemption. But before we start afresh in 2009, I feel we’re missing something from the City’s most powerful who caused this financial mess. It’s called remorse.
We’ve seen our entire banking model torn to shreds, and a complete loss of confidence in our system. This is serious because unlike beauty salons or toy stores, the business model of investment banks does depend upon a belief system - of solvency, liquidity, or profitability. And because restoring this trust is crucial for the City’s existence, our CEO’s should now be groveling for our money, not refusing to lower our mortgage rates.
But I would argue that it wasn’t a crisis of confidence that took down our banks. It was a crisis of competence.
Naturally, I can’t imagine many City executives (who gobbled lobsters at Christmas parties as if we were NOT in a depression) would admit to any incompetence. And why would they? Their actions have made THEM rich, so THEY must be smart.
But CEOs like Dick Fuld, Hank Paulson and Stan O’Neal failed to grasp that a bank’s survival depends upon the confidence of clients. Every time they took a wild risk or pushed the envelope a bit too far, they should have been silently praying to God that nothing else (like a subprime market crash) goes wrong. At forty-to-one leveraging, there’s not much room for error. And this was anything but smart.
These big wigs looked to pin their failures elsewhere - to the short selling hedge funds, or vicious market rumours. But now we need some accountability. We’ve had gross overconfidence followed by gross incompetence.
We deserve a New Year’s apology. I would like to see these fat cat financial executives apologize to their employees, the taxpayers, and the general public. I would like to see them organize a kind of 'City of London confessional' near St. Paul’s cathedral, bow low to the pavement, express penitence, and beg their countrymen’s forgiveness. Such a spectacle would provide some much-needed hope amidst this dour financial panic.
Hopefully in this new year, as we say goodbye to the Gilded Age and ring in the age of responsibility, our politicians, bankers, tycoons, CEOs, CFOs, and those with power will step back and look at the good for society and not the good for themselves.
But first they need to realize that they’ve done something wrong to begin with.
But I would argue that it wasn’t a crisis of confidence that took down our banks. It was a crisis of competence.
Naturally, I can’t imagine many City executives (who gobbled lobsters at Christmas parties as if we were NOT in a depression) would admit to any incompetence. And why would they? Their actions have made THEM rich, so THEY must be smart.
But CEOs like Dick Fuld, Hank Paulson and Stan O’Neal failed to grasp that a bank’s survival depends upon the confidence of clients. Every time they took a wild risk or pushed the envelope a bit too far, they should have been silently praying to God that nothing else (like a subprime market crash) goes wrong. At forty-to-one leveraging, there’s not much room for error. And this was anything but smart.
These big wigs looked to pin their failures elsewhere - to the short selling hedge funds, or vicious market rumours. But now we need some accountability. We’ve had gross overconfidence followed by gross incompetence.
We deserve a New Year’s apology. I would like to see these fat cat financial executives apologize to their employees, the taxpayers, and the general public. I would like to see them organize a kind of 'City of London confessional' near St. Paul’s cathedral, bow low to the pavement, express penitence, and beg their countrymen’s forgiveness. Such a spectacle would provide some much-needed hope amidst this dour financial panic.
Hopefully in this new year, as we say goodbye to the Gilded Age and ring in the age of responsibility, our politicians, bankers, tycoons, CEOs, CFOs, and those with power will step back and look at the good for society and not the good for themselves.
But first they need to realize that they’ve done something wrong to begin with.
Here Is The Writer : Ceedy Girl
CeedyGirl is a saucy young investment banker, trading and dating in the heart of the Square Mile. She has worked in the City for the past four years, has a brutal Starbucks habit, and lives by the mantra 'carpe diem'.
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