You Can’t Make This Up: NY Fed President Slams Bankers For Risk-Taking Behavior
The latest stroke of genius from NY Fed president John Williams, who spoke earlier today to students at the London School of Economic with the intention of giving them career advice and perspectives on corporate culture (Williams says “I’ve now led two major organizations, and culture is both the hardest and the most important thing to get right” and yet he hasn’t worked in the private sector a single day in his life), is simply beyond commentary, even for jaded, veteran observers of endless human observers such as this wwebsite.
Consider the following excerpt from his speech:
When we talk about company culture in the context of financial services, the first thing that comes to mind is the risky, unethical, and sometimes criminal behavior in the banking industry, particularly during the financial crisis. And 10 years on from the crisis, this behavior persists. Instances of fraud, money laundering, and scandals related to foreign exchange and LIBOR continue to make the headlines.
And then consider the following admission from Fed Chair Jerome Powell, made in October 2012:
I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road.
You can almost say that that is our strategy.
As we said, one simply can’t make this shit up anymore.
Tue, 01/14/2020 – 11:45