Buying foreign banks a bad deal?
With US$22 b spent on the buying spree for troubled international banks, and with crumbling values as more misdeeds or debt were revealed, many were chuckling in glee. See, supertalents messing up our reserves. Many are waiting at the sidelines hoping for such opportunities to take potshots at the highly paid and highly acclaimed supertalents in our midst. Are the criticisms justified? I was in favour of these acquisitions from the start. And I am still hopefully optimistic that these were good decisions and will bring in good returns in the long run. It is only in difficult times like this that these top banks have to go down on their knees to beg for fund injections. Without such a window of opportunities, we can wait till the cow comes home for them to divest their interests to a sovereign wealth fund like ours. The recent developments seeing these risky investments plunged in their values in the billions surely will bring up the questions of due diligence. Did we go in with eyes wide open or eyes wide shut? Were we told of the full story before parting with our billions? And did we protect ourselves from such an eventuality, or did we know how much risk we are exposing ourselves to? If the decision makers went in fully aware of the possible pitfalls and consequences, and the decision made based on acceptable calculated risk, then the public should not take issues with the short term fluctuation. We only need to fear if we are conned into parting with our billions by the banks that did not fully disclose their full liabilities and debt to us. And if that be the case, hopefully legal actions can recover some of the damages. And rightfully too, the decision makers need to be kicked in the arse. When all due diligence have been taken, and the losses were due to developments that were difficult to foresee, then the public should not be too harsh on their criticisms. We can now hope that everything is within our control and expectations, and in the long run we shall reap the fruits of risk taking and opportunism.