August 09, 2012

What kind of parents are you?

Sir, Frank Partnoy more than suggests that lawyers might have been more of enablers and emboldeners of bank shenanigans and concludes: One lesson from recent scandals is that banks need reliably independent in-house counsel, with a strong moral backbone”, “Who are the true villains of the StanChart tragedy?” August 9. Does that not go for regulators too? 

I mean if your children’s nanny had allowed, even pushed, one of them to go bungee-jumping, on account of the child begging, and some safety rating agency deeming that safe, and then a fatal accident happened… what would you do with the nanny? Would you still retain her services? If so, what kind of parent would that make of you? 

Currently those same nannies who with Basel II authorized banks to lend to Greece holding only 1.6 percent in capital, only because credit rating agencies deemed it safe, and which signifies a mindboggling authorized 62.5 to 1 leverage, have been retained and put in charge of coming up with Basel III, if not, like Mario Draghi, kept busy as president of the European Central Bank. What kind of parents does that make you?