Bankers thrive on culture of greed
Boastful and unrepentant investment bankers show that greed is alive and well, proving that regulations are only as good as banking culture
Donald Trump's ambition to become US president and his bombastic, announcement at Trump Tower is a symbol of today's rich "1 per cent" class of American business leader: gauche, greedy, loud and bellicose. In a speech that alternated from boastful swagger to boastful swagger, he repeatedly proclaimed his net worth and declared how he would save America.
So it is not surprising that Trump's showmanship only capped a month of recent public statements from bankers who gladly show that the culture of self-entitlement and greed is alive and well. And more disturbing, fines and even jail time may be unable to deter bankers from misconduct and crime. Perhaps bankers' push-it-to-the-limit culture hasn't really changed at all since the financial crisis.
Last month at the annual general meeting of JP Morgan Chase, chief executive Jamie Dimon lashed out at "lazy" shareholders who followed proxy advisory services' guidance to vote against his pay package. His response to the events that displeased him move from arrogance to sheer entertainment:
"If you do that, you are just irresponsible, I'm sorry. And you probably aren't a very good investor, either. Believe me. I know some of you here do it because you're lazy."
The vote against the executives' pay package at JP Morgan's annual meeting in May was 38.1 per cent - a loud and clear message from major institutional investors. In past meetings, Dimon has never criticised shareholder laziness where it has resulted in the tacit endorsement of his previous remuneration packages.
Then an unrepentant and truculent Richard Fuld, former chief executive of Lehman Brothers, resurfaced to speak at a public event for the first time since 2008. Known as the "gorilla" of Wall Street for his terse and combative style, he ignited acrimonious questions from the audience when he refused to acknowledge any mistakes on his part. He said, "The crisis was a perfect storm, but it starts with the government."
He proceeded to describe that the government "paved the way for unsuitable borrowers to buy homes, caused an interest rate shock, and then unfairly 'mandated' the bankruptcy of Lehman while saving competitors". Fuld avoided any mention of Lehman's substantial role in issuing subprime mortgages and that Lehman employees who owned 30 per cent of the US$40 billion bank lost most of their savings.