Confession: Banks Ignore Risk & Sell Unethically

goldsilverworlds.com / By Gold Silver Worlds / December 22, 2012

Sad. Scary. Unethical. That is how we describe the information revealed by Paul Morre, former top executive of a big bank in Scotland. We have never attended board meetings inside a bank to confirm that these statements are correct. However, basic logic combined with the evolution of the financial and banking crisis are the criteria we would use to accept this confession as evidence. Courtesy of PositiveMoney.org.

Obviously most of us “intuitively” know that the most of the information contained in this confession is true. Still, it is different to hear someone “from within” talking about. The interview contains some terrific quotes which we listed at the end of this article. They provide insights on a micro level which is more or less inside a bank. On a higher level, economic and even societal, the following two quotes stand out.

“Do the top people who are making the key strategic and policy decisions inside banks, understand and thoroughly consider their impact on the wider economy? I don’t ever remember in all my time any discussion, anywhere, in any bank I have ever been. They do consider whether the economy would impact the bank, but not whether the bank affects the economy. Because the company’s law system drives them to consider the fiduciary duties of the directors to the company, not to the shareholders. But it has been interpreted as if the only stakeholder is the shareholder. And who represents the shareholder? The investment analist. What do they want? Short term growth. The system in so many respects needs to be revised. It is a huge shame that we didn’t use the banking crisis to investigate exactly how decisions are made.”

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