The Global Financial Crisis: enabling brilliant, dynamic bankers and curtailing dodgy, incompetent ones
This week I had a catch-up with one of my former managers — the brilliant, dynamic one — and, naturally, we covered a topic that’s dominated the media over the last 18 months: the global financial crisis. It’s interesting how our views are evolving, his as an insider in the thick of it and mine as a former insider now outsider who is, frankly, shocked at the scale of writedowns and losses incurred by once great institutions and benchmarks for corporate excellence.
We both agree that things remain tough in the global economy and for banks particularly. The finance raising environment remains slow and this has the knock-on effect of companies not being invested in, which isn’t good for the economy generally. The recruitment and employment sector is also suffering as a result.
Thankfully, he and his team are now involved in one of the world’s largest and most important transactions, one that will contribute to getting one particular country’s economy back up on its feet. Knowing that his team is involved is heartening. They’re simply THE BEST IN THE WORLD AT WHAT THEY DO and in complete contrast to the dolts who got us all into the mire with mortgage CDO risks. This isn’t merely loyalty — or some may say “subjective bias”; their strengths have been independently recognized in established banking journals and acknowledged by competing teams from other institutions.
From a personal experience level, I know that portfolios and projects led by him have a higher probability of success than failure.
His leadership means that his teams are, often, at the top of their specialism and skills range. They’re called upon to trouble-shoot the most complex challenges in the tightest of times, against what appear to be insurmountable obstacles and they manage to do it, seamlessly. They invariably bring with them vital technical knowhow about balance sheet restructuring, strategic nous and interpersonal panache. That’s his modus operandi and it becomes theirs.
So now they’re in there, clearing up the messes in various institutions that they had no part in creating.
Now, for months on end, bankers have all been tarred with the same brush: hubris, greed, ego, dodgy, money-grubbing and stupid. In fact, 99 percent of bankers are hard-working, intelligent, competent and committed to the wider community (including charities). It’s just unfortunate that 1 percent was allowed to spoil the barrel and bring economies to the brink. It’s even more unfortunate that measures and mandates were not in place to empower appropriate senior management to prevent ridiculous levels of risk-taking and leverage. Equally, it’s unfortunate the regulatory authorities and governments did not intervene sooner and with more directed focus.
Just as in the case of Tim Geithner, the US Treasury Secretary, Alistair Darling the British Chancellor has this week laid out a White Paper on financial sector reforms:
* http://www.hm-treasury.gov.uk/speech_chex_080709.htm
· http://www.thirdsector.co.uk/Channels/Finance/login/919271/
· http://blogs.reuters.com/uknews/2009/07/08/financial-regulation-plan-white-paper-or-white-flag/
Here’s a personal observation and perhaps it’s a reflection on an area the government needs improving upon: communication and strategic think through. When we Google “Alistair Darling white paper” we don’t get any links to HM Treasury and the original drafts of the Chancellor’s speeches — not even by the third page of results (!). Nor do we even get any links to YouTube / Hulu / other video-sharing sites of those speeches. Moreover even when we Google with “Alistair Darling white paper HM Treasury” we don’t get the latest White Paper on the financial reforms. Instead, the top link leads us to some obscure 1999 paper on “Housing Policy Green Paper”.
Hmmn….weren’t we searching for a WHITE paper? How’s the government tagging its content for SEO?
If government places tackling financial reform as a top agenda item, then they should ensure the HM Treasury’s materials on the matter are at the top of all search engines and the public have ready access to direct source. Compare this with the American approach. Obama and Geithner’s speeches are linked to the whitehouse.gov site, barackobama.com or on YouTube / other video-sharing site.
As for the financial reforms on both sides of the Atlantic, it will be a challenge to make those reforms flexible, TARGETED and easy to implement. They should enable the brilliant and dynamic bankers to innovate and arrange the financing necessary to build homes, hospitals, schools, infrastructure, techco’s, etc. whilst also making it impossible for dodgy, incompetent bankers to operate.
I believe the transaction my former manager and his team is putting together will go some way in showing us what banking competence should look and be like. I hope they’re left to get on with it and sort it out rather than hindered by politicking and people who don’t know, technically, how to deal with balance sheet and structured instrument complexities.
Over recent times, my mother has asked the “What if…….?” question. What would have happened if I’d stayed under his leadership and in his team. Well, I’d now be part of the world’s #1 team in that specialism and my sleeves would be rolled up on the one of the most important transactions to tackle the global financial crisis. What an amazing experience that would be to have on a CV, at my age.
Then again……..I wouldn’t be contributing my wee bit to the Global Brain or constructs of the Semantic Web or presenting the case for “Web 3.0: socially-voiced co-creation”. I wouldn’t be getting excited about the possibilities of haptics, metaverses, mapping, knowledge representation, AI, natural language, source-binding, dynamic edits, P2P, the Cloud etc. etc. etc. to enable ordinary people to collaborate and cross-pollinate ideas and materials towards solution-finding.
I wouldn’t be playing with code to make it do what I believe it should do.
I’d be forensically dissecting a bank’s decimated balance sheet and going, “???!!! How did people let this happen?”
Technological innovation is where it’s @ and it may yet prove to be the tool which empowers us all to prevent future global financial crises. We shall see…………
