That they did not know it does not mean they should not have known it!
Sir John Kay in “Banks got burned by their own ‘innocent fraud’”, October 14 writes: “Is the deception of others more or less venal when one has also deceived oneself? That question must be left for moral philosophers – and historians of our era – to answer”.
Absolutely not! We cannot afford to leave this question to moral philosophers or historians.
The question that John Kay poses paints out the possibility that the guilty party is innocent because it “has also deceived” itself and this, in this case at least, is unacceptable. The Financial Regulators should have known that creating a system that empowered so much so few with providing information to the market as the regulators did with the credit rating agencies was bound to lead to a crisis like the one we are having.
The Financial Regulators might argue that “they did not know it”, but that only puts the burden squarely back on us to place the regulation of the financial sector in the hands of persons capable of knowing such fundamentally simple things of life and financial markets.
Absolutely not! We cannot afford to leave this question to moral philosophers or historians.
The question that John Kay poses paints out the possibility that the guilty party is innocent because it “has also deceived” itself and this, in this case at least, is unacceptable. The Financial Regulators should have known that creating a system that empowered so much so few with providing information to the market as the regulators did with the credit rating agencies was bound to lead to a crisis like the one we are having.
The Financial Regulators might argue that “they did not know it”, but that only puts the burden squarely back on us to place the regulation of the financial sector in the hands of persons capable of knowing such fundamentally simple things of life and financial markets.
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