Has banking culture really changed?

The FT's Gillian Tett discusses the 'flaw' in Alan Greenspan's thinking and how culture has been overlooked at the cost to the global economy 10 years on from the financial crisis. By understanding the role of culture in banking, are we more resilient to another crisis now?

[remlatzargonix]

issue only partially culture, and it is due to the lack of accountability! Jail those who commit fraud, and other white-collar crimes!
There were people who were warning of the dangers and looming problem, but no one listened to them. They did not have enough people to police the system and not enough regulators to carry out the existing regulation.

Economics is NOT a science. Most economic models are not very robust, in the sense that they heavily rely on assumptions (many of which are dubious at best) and when those assumptions are not met, the model falls apart. The problem comes when those in power put too much reliance and faith in those unreliable scientist worth their salt knows not to put too much faith in models, particularly when the models are not robust. Unfortunately, those who understand the models and their short-comings, usually are not the ones in charge, so they can't rein in the bosses.

[slovokia]

The next financial crisis will involve the sovereign debts of major developed economies together with the central banks associated with those economies. Two words: Fiscal Dominance. At some level of government debt to GDP the central banks will no longer be able to credibly claim to uphold their fundamental goal of price stability because managing the burden of government debt will become a higher priority. Populist politics just accelerates the process of arriving at this end state by producing worse fiscal outcomes.

[katieh]

This is such an interesting angle to review! I remember learning what CDOs were and being blown away by the blatant greed in the world.

[ThroatSore]

And at 10 minutes he states that he was misquoted and then states that he did say that but the context was wrong . that's what we're dealing with here

[ukasz]

what about 'too big to fail' question ? Is it solved ?

[sebastianaguiarbrunemeier]

Is Greenspan rocking a Patek Phillipe Sporting model watch?

[alwyn]

There's a banking enquiry in Australia. Banks charge fees to people who aren't getting any advice. Charged a dead guy fees for 10 years after he died. There should be some here that end up in jail after this.

[gana]

I m still not able to understand what 'culture' means?

[PrivateAckbar]

Reckless wall street culture is a symptom not a cause. The business cycle is a product of centrally planned interest rates and government manipulation of money and credit. There wasn't any philosophical change among the political establishment during the 08 crisis. We're still living in an era of Keynesian central planning. It isn't hyperbole to say that the government intervention and expansion of the monetary base in response to the crisis was unprecedented. It didn't offer a very good boom, but housing prices are massively inflated again and we're overdue for a depression much worse than 08.

[MrRea]

One fundamental issue, the effect of technology and algorithms has not been discussed. How many people (regulators and bankers) at the top REALLY know their true impact?

[dubrosis]

Really well done. Culture is key, and the problem with a low unemployment rate is companies stretch to those bottom quartile / hungry and pliable employees (and sometimes leaders) to execute a bad agenda.

[nohopeequalsnofear]

Translation of Greenspan,
" I know nothing"

[CJ_]

I think more attention needs to be paid to non-index firms (ie. small and medium companies) that provide the bulk of a country's earnings and employment. Ideally new services technology should give them more of the tools previously only available to large scale firms. So for example maybe powerful Blockchain techniques could allow for the creation of unitised private equity funds investing across millions of micro firms, simultaneously providing institutional and retail investment capital to said micro firms, and on other side of the trade - better yields to investors.

[weareallbeingwatched]

"Why do we allow banking"... very interesting that this fellow suggests that as an activity it is borderline criminal/bandit in nature.

[gregoryhamlet]

The only questions that banks ask themselves are how far can we take it and still get away with it.. Simple

[richardgoode]

A as a culture of a system as a bank as a loan or a exchange of currency.

[JeffMorrisonAdventures]

Stand by for up coming crash! Very likely a huge devaluation of the US dollar. Should i convert all holdings to gold?

[fitnesspoint]

3:12 Greespan still doesn't get it and wrong again. He insisting on that the humans and the world are rational. They are not as he readily adimitted earlier in the interview that fear an emotional component was not part of his financial world view.

[remytangooo]

"Populism - i don't think that is a rational approach to develop economic economies". i don't understand what does Alan Greenspan mean by this. Shouldn't the economy be supporting the ordinary people? The stock market is kinda created so that ordinary people can become investors and that create a win-win situation right? Does he mean that the world shouldn't be implementing policies to support the ordinary people? I felt uncomfortable when he states this. I would really appreciate anyone who can explain this to me thank you!

[stephenconlon]

Bankers take risks with money they can’t see and that leads to irresponsibility