Monday, 19 September 2011

Another Day in Paradise

Revelations over the weekend that the losses incurred at UBS Bank were from a series of accumulated rogue trades spread over a number of months were pretty depressing.

The theory is that because the rogue trader, Kweku Adoboli, was very familiar with the firm's back office and so he was able to disguise his activities through expert knowledge which hindered the company's ability to see what was going on.

Right in front of their faces. Amidst all the checks and balances. Inside all those complex and clever systems. In front of all those expert eyes.

And in front of all those greedy managers.

Adoboli was part of some sort of 'Special Services' equivalent of crack traders who used complex tools to form investments that made super-money. He was paid a fat salary and mega-bonuses and left to do virtually what he damn well liked as it appeared that he was making mega-bucks. And that, in banking terms, is a good thing no matter how he was doing it.

And this is the point. The time for us all to blame the banks for the worst crash since The Depression is over, so the bankers say. Yet here they are at it again. Gambling with more money in 5 minutes than the rest of us will make in a lifetime. Kids like Adoboli are given carte blanche to do what they like and how they like. And so long as the numbers look good, who cares how he did it.

And then he went and spoiled the party. He committed the greatest crime of all in banking terms.

He went and got himself caught.

Once again the outcome is that the world will see the bad activities of one rogue trader. This neatly deflects our view from the systemic gambling that goes on in the name of banking. We have neither been hard enough or fierce enough in tracking down the culprits responsible for risking all of us.

And this whole affair proves that banking doesn't see itself as the problem. Adoboli is another lamb for the slaughter. The rest of them carry on as normal, risking our futures every single day in the pursuit of incredible bonuses.

We had a chance to fix it and we blew it as the bankers have us over a barrel. We want to keep our way of life? Then shut up and put up with the fact that a few clever guys will make more money than God every year so long as we foot the bill if they mess it up.

Hey ho. Another day in the real world.

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