When risky things turn out risky, they turn out as expected. It is in what’s “safe” where the real unexpected dangers lurk

Sir Lucy Kellaway when referring to Sergio Ermotti, the chief executive of UBS, telling “all the bankers who work for him that henceforth it was OK for them to make mistakes” writes: “Mistakes are never OK. And they are particularly un-OK in banking” because… “The main point about risks is that they are risky — and risky things have a way of going wrong.” “Listen to brain surgeons, not bankers, for the truth on errors” September 27.

Not so. When risky things turn out risky, they are actually turning out right as expected… it is when safe things turn out risky, that things can really go wrong.

And Kellaway argues: “What Mr Ermotti should have made clear was that sometimes his employees must take risks, and sometimes things will go wrong. When that happens, no one must ever make light of their cock-ups. Instead they should carry the memory of all their mistakes as part of their own internal score sheet of how they have fared as a banker.”

Indeed, but the greatest cock-up in banking history, a cock up so big that it is being frantically ignored, was the one made by bank regulators. It happened when they allowed banks to hold much less capital against assets perceived as safe, meaning against those assets that precisely because they are perceived as safe, represent the biggest danger to the banking system.

Lucy Kellaway, I am sorry, I have no idea why we would need to listen to brain surgeons for the truth on errors… even a bank regulator who knew what he was doing, should know that.

@PerKurowski