Rationally Irresponsible – personal thoughts

The recent revelations that Barclays have been massively fined for fixing what is now being called Lie-bor coincide with the news that J. P. Morgan’s trading loss could reach as much as $9bn – yes this from the bank that seemed to think it was smarter than the rest in avoiding the meltdown of 2008. Elsewhere Matt Taibbi of Rolling Stone wrote recently about three GECapital employees being convicted of rigging the prices at which Bonds of Municipalities trade in the US effectively costing these local authorities of billions of dollars. They managed to do this with the help of a range of well known big banks.

One would have thought that the financial crisis of 2008 would have washed out most of the evils of the financial system but it is clear that the potential rewards are still so great that unethical, irresponsible and illegal behaviour will persist for the foreseeable future.

Sadly this sort of behaviour exists all the way down the financial food chain rearing its greedy mouth in the form of complex products with exotic and extortionate charging structures being ‘flogged’ often to those not in a position to be able to make an informed judgement as to what they are buying.

If I were a pessimist it would perhaps dismay me to be part of the financial services industry but I take heart from the efforts of others who share my view that you should always act with your clients best interests at heart. I’m convinced that the overwhelming majority of people in the industry feel the same way and valuable initiatives such as those being undertaken by the Institute for a Fiduciary Standard in the US are huge steps in the right direction. As ever the actions of an irresponsible minority seduced by financial reward are spoiling everything for their follow industry participants but most of all the clients and customers who place their trust and hard earned money in our hands.