by Jerome a Paris
Wed Feb 13th, 2008 at 05:55:21 AM EST
This Lazy quote Diary to point out the incredibly violent charge against bankers by John Kay, one of the regular columnists in the FT. It's quite stunning to read this, frankly:
Bankers, like gangs, just get carried away
Groups routinely demonstrate behaviour that few if any members would choose to adopt as individuals. Look at teenage gangs, soccer hooligans, religious zealots - or clubbers. Sometimes the group provides a cloak of legitimacy for misbehaviour. The trading floor has a similar effect. You get carried away, explained Jérôme Kerviel, Société Générale's former trader. The process by which hysterical groups damage themselves and others in assertion of preposterous beliefs is a recurrent theme in human history. We see it in anti-Semitic pogroms or McCarthyite persecution. Before the mysteries of structured credit there were the mysteries of witchcraft; before investment banks used initial public offerings to turn dotcom concepts into billions of dollars alchemists claimed to turn base metals into gold.
Shared values and beliefs create a group identity. No matter that the beliefs may be absurd or the values contemptible: that Salem was not besieged by witches, the US was not threatened by communist infiltration, that greed is not good and that suicide bombers will not be greeted in paradise by 71 virgins. The very improbability of the belief, the unacceptability of the values, reinforces their social function; these factors distinguish the real members of the group from the less committed.
Gangs differentiate themselves by their characteristic beliefs and values. Your performance as a gang member is judged not by rational, objective criteria but by the approbation of your peers. As on the streets, also in the office towers.
Like the politicians who invaded Iraq, executives of major financial services businesses did not reflect on questions to which they did not wish to know the answer.
The whole article is worth reading, if you can get through the firewall. Most of it is spot on.