J.P. Morgan to pay $2 billion over Madoff case

Not sure if one should cry or laugh when reading headlines such as this one. How did the parties to this shameful deal arrive at the number? Did it get picked out of thin air? Is there any real proof of culpability? Since when is it a crime to conduct one's business prudently? If the regulators did not spot the Madoff fraud have they received any punishment? And why is JP Morgan management agreeing to this 'settlement' (which leaves the question where the money goes, is it just used to plug the hole in the government's budget?)

P.S.: it is gratifying to read that a 'portion' of the $2 billion penalty will be earmarked for victims of the Madoff fraud. How generous, and the state appropriates the majority of the loot for itself. Why don't the regulators make a contribution to the victims as well? I guess the only reason why regulators do not throw the book at specific JP Morgan executives is that they want to avoid questions over why they are spared jail after such a major cock-up as the failure to detect the Madoff fraud in good time.

Nothing can surprise me with respect to the ever-increasing reach that the 'authorities' give the interpretation of the ill-fated and useless money laundering laws. Soon the £5 loan that a schoolchild receives from a granny will have to be reported as 'suspicious' by anyone who has knowledge of it, for who but the 'regulators' can (with hindsight) determine what is suspicious or not? Already anyone trying to open a bank account (or even access a long-forgotten one) is basically treated as a potential criminal these days. And all this wasteful effort is expended in order to undo the results of bad laws imposed by an undemocratic process.

ECB Banking Review - Moving Deckchairs on the Titanic

More costs borne by shareholders, savers and taxpayers, more jobs for the boys - happy to be an Eurocrat in this age - and still no change to the basic rules of the banking game. Happy New Year 2014!

Mentoring and Coaching - a simple model

While some experts try to make things complicated busy market professionals need simple solutions when they reach out for independent advice about how to manage their careers. For most successful executives the most significant barrier to effective mentoring and coaching is the illusion that any outside help is superfluous. After this somewhat arrogant attitude is overcome it quickly becomes obvious even to the most self-confident person that adding another perspective can be a useful tool to overcome any personal or professional issue that arises at work.

Summers regurgitates tired old macro cliches

Guessing what the 'correct' or 'true' natural interest rate is may be a worthwhile passe temps for tenured university professors like Larry Summers but it is of little use to explain/solve the pressing economic problems of our time. Such as Unemployment or Inequality. Both have little to do with macro economic mumbo jumbo but a lot with poorly designed policies and laws.

More Women on Boards

Hector Sants may have benefited from Coaching

News that another senior finance professional - this time Hector Sants, Barclays Bank's Head of compliance - needs to take time off to avoid burn-out, highlights the pressure that staff at all levels are facing these days. This burden gets progressively stronger the more an executive moves up the ranks of the organisation. 

20-25 years ago hardly anyone in the financial markets had ever heard or seen a compliance manual, let alone a compliance officer. And the markets functioned quite well. Now the rulebooks run to thousands of pages - and are constantly 'updated' and expanded with new rules - everything is up to interpretation and everyone wants to cover his backside. No wonder that people like Sants feel the stress (ironically he helped create many of these rules!).

Another problem facing senior managers is the fact that their jobs can be quite lonely ones where they are constantly under pressure from two sides - aspiring subordinates keen to get their job or pressure from their own supervisor who wants to squeeze out a better performance from their reports.

More Swaps, more Risks

Glad to see that another swap market (Chinese Yuan) seems to be in rude health, but nearly all swaps are facilitated by a bank acting as counterparty - and are these risks not contrary to what current regulatory efforts want to achieve? If some regulators advocate a move to a leverage ratio of 10 where does that leave the gazillions of over-the-counter swaps?

Government Mis-Selling Scandal

Having been on the receiving end of many a sales call trying to convince me of the necessity of buying identity theft protection for my credit cards,I can say that the present hysteria about this issue here in the UK can only be called a modern version of the witch hunt. Given that this dark period is but a few hundred years away it is remarkable that not much has changed in human nature - certainly not in the nature of those who want to bully and nanny the citizen.
Condemning banks in blanket fashion to 'compensate' those who were supposedly mis-sold protection products goes against all notions of legal due process. Only slightly worse is the silence of the guardians of our investment monies who should scream bloody murder as the companies they invest on our behalf get fleeced by regulators. Where is the Governance army hiding when it is really needed?
Government can play a role in protecting the consumer, as can all the worthy or unworthy organisations who claim to have the consumer's interest at heart. But let them issue warnings, educate the public so that people can make decisions that are (hopefully) protecting their own interest. Nobody forced me to buy any product, suitable or unsuitable. And maybe some people might have benefitted from the protection they bought. Who speaks up for them?

CMI should know better - no point in meaningless comparisons

When the Chartered Management Institute (CMI) proclaims that women on average receive a lower bonus than men one has to wonder what purpose this Institute really serves. Without detailed forensic comparison on a job-by-job basis this discovery - if you want to call it that - is meaningless and can only be considered an effort to get a bit of publicity.

FATCA - Testimony to EU Incompetence

While no one can blame the US for perpetrating legislative overreach as long as it gets away with it the oppressive FATCA legislation would never have happened if the (unelected) bureaucrats in the EU would have taken sufficient time off dining at taxpayer's expense in the expensive restaurants offered by Brussels. A discreet threat of the imposition of a countervailing duty on the activities of US financial institutions in the EU should have put a stop on this legislation at an early stage. Would the US really have pushed the button and chosen the nuclear option of total financial war with the EU? I doubt it. Unfortunately the senior brass in the financial sector here in Europe has also missed an opportunity to push against this unnecessary regulatory burden which leads to the conclusion that only a reform of democratic structures in the EU and its member countries can lead to a better defence of civil liberties. See www.dirdem.org if you want to support me on this.