Showing posts with label stampede. Show all posts
Showing posts with label stampede. Show all posts

December 02, 2008

Those cows trusted us!

Sir Peter Schwartz in “Right question that has several possible answers” December 2, rephrases the Queen’s question of “Why did nobody see this coming?” into a “What would it take to make decision-makers both believe and act?”

Absolutely the most valuable lesson we could take out of the current mess is to get a better understanding of why people can turn blind and deaf when they are warned on impending disasters.

In this particular case I would like to go back even a decade or so to ask the regulators of how come they in Basel could come up with such a crazy idea of sending out in the financial markets their City Slickers (1991), the credit rating agencies, knowing well these would, sooner or later, cause a stampede; and how come they still believe they could keep on using them without an even worse stampede ensuing in the future?

I can still hear one of the slickers saying “Those cows trusted us!