Where are the accountabilities?
Should heads roll? The near collapse of the US financial system and the bankruptcy of several investment banks must surely see someone taking responsibility and getting the stick. Looks like it is not going to happen and they will live happily ever after with their loots over the years of mismanagement. According to Ann Williams in her article on the financial crisis in the Sunday Times, the CEO of Lehman Brothers, Richard Fuld, 'gets to keep the US490 million he earned.' If it was a simple case of business failure, fair enough. What if there were mismanagement amounting to fraud, cooking of accounts, hiding losses etc? From her article, she mentioned 10 reasons for the current turmoil and among which were the churning out of dubious financial products to unwary customers, raising loans and living off loans and more loans, 'keeping loss making investments "off balance sheet" and the failure of regulators to do their due diligence. All the policing and regulating agencies, including auditors etc that were supposed to check on the soundness of business practices and accounting systems were not doing their jobs. The accountability of failure of such a scale does not lie alone on the respective investment banks but a hoard of regulating bodies, including govt agencies. But as mentioned by Ann Williams, the Americans and those apeing the American practices, have been living on a culture of greed 'that gave outsized rewards for success and risk taking but did not penalise failure.' Do we have a mirror of similar practices and culture here? Are we harbouring a similar potential problem that is waiting to explode in our face? Have we been doing things like the Americans, for greed without any concern to the consequences of failure? This is what Tan Kin Lian said, 'There has to be stronger protection of consumers. Regulators should disallow unsuitable products form being marketed to the retail investors. Regulators also need to take stronger action against financial institutions that fail in their duy to provide good advice to their customers.' This should include financial institutions and regulators who have failed to do their due diligence. A case in point is the churning out of many IPOs into the stock markets which eventually failed within a few years despite the glorious accounting data dished out to the investors in the prospectus. Listing companies into the stock exchange with no control on their qualities is a crime. So far no one has been held accountable.