By Ron Robins
I’m both astounded and somewhat bemused by the media frenzy surrounding Greg Smith’s critique of Goldman Sachs’ ethics. I didn’t even bother commenting on it yesterday because after what we experienced in 2008/9, I believed that everyone knew Wall Street and many bankers’ ethics were atrocious anyway! After all, the respected 2012 Edelman Trust Barometer finds public trust in banking and finance the lowest of any industries.
Yet, despite the anger, the public refuse to appoint politicians who will aggressively tackle the real ethical issues in the financial system. The reason: the public knows that to do so means they’ll take a financial hit! For instance, ethical practices should require marking assets at market values on balance sheets. On that basis, it’s likely that a huge swath of the US banking and financial industry would be insolvent and the American public forced to take mammoth losses.
Until Mr. Joe public improves upon their own ethical conduct, putting ethics above financial gains or losses, we’re unlikely to see much change among politicians or in the financial and banking industries. That’s why I don’t see what all the fuss is about.
March 14,. 2012
© Ron Robins 2012