The
Wall Street Journal reported recently that the US Fed in order to rein in high
risk taking aggressive banks, which had to be bailed with tax payers money for
their rogue deals which landed them in high losses, has advised banks that they
need to get deep into the culture and behavior patterns of their employees in
order to ensure there is no recurrence of high VAR outages. Actually this issue
is not one which is restricted to banks and can be resolved by simply weeding
out a few so called aberrant employees. Neither can it be rectified by trying
to ingrain ethical behavior among employees of financial services sector nor
trying to doing employing surveys for tracking rating ratio of happy employees
to grumpy employees over time! Wells Fargo, arguably the best bank in US also
does culture surveys among its employees.
The
issue of culture cannot be studied in isolation in banks only. The issue is a
far more deep seated societal malaise. The high risk taking and aggressive
streak runs much deeper through the veins and aortas of society in general. Hence
the analysis is required to be done over the entire canvas of society.
Today
the violence which is pervading society has the same root causes, whether it is
the action of a few rogue traders in banks, or a disturbed adult on a shooting
spree at malls, or terrorists holding to ransom dozens of innocent people, or
even a naïve three year old shooting his parents with their gun. Though these
action points may seem random, but there is a high correlation between them and
a common pattern which can be traced to the development of a hyper competitive,
acquisitive, materialistic, conditioned society. The greed and avarice neurosis
is running through all walks of life. It stems from the so called rush for “higher,
faster, bigger, richer, better” right from school to families, corporations,
and nations.
Recently
three of the top four banks in US reported weak earnings for Q4 of 2014.
Overall the banks in the developed economies are still to recover fully form the
disastrous meltdown of 2008. In fact, US and European banks paid $65 bn in
penalties and fines to regulators in 2014, 40% higher than the previous year.
Credit rater S&P had to pay almost $100 mn in penalties to regulators and
$1.5 bn to the justice departments for inflated ratings.
It
is so ludicrous to see regulators wanting banks to do culture, behavioral and
psychological tests of their employees after several financial meltdowns mostly
due the crony nexus between banks, credit raters, stock markets, money markets,
regulators and corporates. Agreed there is a boom and bust cycle in the
financial markets, but conducting micro level research on employees is strange
to say the least. Most of the weapons of mass destruction of the financial
system were designed by rocket scientists who sat in their ivory tower rooms in
the same floor as their CEOs corner rooms. The complex math algorithmic models
of the derivatives and mortgage backed securities were not understood by the
CEOs of the banks or even by the credit raters and regulators. The blind faith
of most of us in complex modeling even without understanding them is
frightening. If these models were made with reasonable assumptions and stress
tested for all possible scenarios then we would not have been in the soup we
are in today. The VAR models had never built in the worst case scenario
combinations properly nor even envisaged the bunching of events.
Another
frightening nexus has been created within the health care industry where there
is deep connivance between pharmaceutical industry, doctors, hospitals, health
insurance and the regulatory authorities. Profit is the key to all the
developments in this network. Hence we humans are mere guinea pigs in their
search for higher profits.
Aggression,
cheating, corruption and violence in society are a deep seated phenomenon since
times immemorial. But with the proliferation of guns, science, technology, wealth,
cars and mass production, social dimensions of meum and teum, endless
gratification, instant karma, etc have taken up ugly contours. Often the so
called advanced societies in the developed world are found to have deep
neurosis, psychological disorders, and mental sickness. The number of psychiatrists and psychoanalysts in the these
societies is the highest per head. The very norms of sane societies have
changed. There are deep, dark and crazy desires which can only be fulfilled by
transgressing upon the happiness of others. There is no inner peace. Hence
since the 60s and age of flower power there has been an yearning for yoga and
Buddhism and other oriental practices
The
vicarious lifestyles prevalent in highly developed societies have resulted in
mindless high energy lifestyles, technological progress, hyper competition,
mass consumerism and mall cultures, infinite varieties of food, clothing,
electronics, etc to provide pleasure to the jaded, blunted and desensitized
senses and taste buds. All this has lead to the plundering of all natural
resources, carbon emissions, and irreversible climate changes. All these
anthropogenic acts have emanated from plastic culture we have embraced and
spread all over the globe thanks to media and internet. Now virtually half of
the world owns smart phones and have become digitized zombies. A surreal sick
society is the hotbed which has bred the financial monsters of Wall Street.
Indeed,
there is an urgent need for a newgrammaroflife.blogspot.in, which provides solutions
for the deep rooted malaise at the individual, society & economy levels which
would eventually lead to a societal and climate collapse.
