Merchants of Financial Mayhem Dancing Again

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing."
--Former Citigroup (C) CEO Charles Prince (from an exclusive July 2007 Financial Times interview)

After trillions of dollars of losses, the near seizing up of the global financial system, a degree of taxpayer support for and government intervention in the banking sector and other parts of the economy that is unprecedented, and a growing public backlash against Wall Street and the wealthy, you would have thought that those who created the mess we are in would have changed their tune, or at the very least, acknowledged that it was time to reconsider old, bad habits. On the contrary, if the following Reuters report, "Noyer Warns Banks on Excessive Risk," is anything to go by, it appears that the merchants of financial mayhem are up out of their seats, dancing again:

European Central Bank Governing Council member Christian Noyer warned that banks are taking the same risks that led to the financial crisis and said they should preserve capital rather than pay it out to bankers and investors.

His comments came as regulators around the world mull reforms to lower the risks that large banks can pose to the financial system and rein in the type of recklessness that fueled the credit crisis.

Noyer said impressive bank profits in recent weeks were a result of public policies to combat the crisis, and did not mean the industry had recovered its balance or that further reforms were not necessary.

Comments

[Michael Clark:]

"European Central Bank Governing Council member Christian Noyer warned that banks are taking the same risks that led to the financial crisis and said they should preserve capital rather than pay it out to bankers and investors."

This is the whole point of NOT paying obscene bonuses. 7 years of fat; 7 years of lean. We need to learn to save for the lean years. That's what SAVING (I know it is a dirty word) is all about. Understanding that day (wealth) is followed by night (poverty). You don't spend wildly while you are making money hand-over-fist because a time of contraction is surely coming, as sure as night follows day.

Oct 27 05:46 AM

[john s. gordon:]

well the compulsive gamblers have to gamble somewhere.
may i suggest las vegas for a change?
> jack

Oct 27 09:37 AM