2/22/2013

Overhauling of banking sector to regain trust




The CEO of DBS, Piyush Gupta, spoke to students and finance professionals about the need to overhaul the banking sector to regain public trust. This call is troubling as it touches only the surface of a major industry where trust was fundamental to its existence.

The banking industry used to be very conservative and operated under some fundamental rules like strong and steady without big risk taking. Today, the industry is the biggest gambler and risk taker in the history of modern finance. The risk the banking sector is taking is many times more than all the casinos in the world combined. A slip is all it needs to bring the world economy down to its knees. It did in the late 1990s and a bigger one is coming as nothing really changes. The gambling gets only bigger and more furious. They need to pay themselves crazy.

What Piyush Gupta said is nothing knew. Jackson Tai, his predecessor, also said more or less the same thing. But it was all words. Who would want to overturn the gravy train when every banker is filling his bank accounts with slush funds and easy money from big stake gamblings, yes, in derivatives and complex derivatives, not forgetting all the insidious dealings in money laundering, in rate fixing and crooked deals etc etc ?

So what, nothing will change and the game will continue as big money needs to be paid to satiate the big appetite of the bankers. How else or where else could they find the money to pay themselves?

At the domestic level Piyush pointed his fingers at ‘…ineffective boards, the outsourcing of risk assessment to rating agencies and the creation of overly complex derivative products.’ But these have been on going for ages. Even the recommendations by SIAS to hang responsibility on boards of directors for wrong doings in their companies were shot down for fear that there will be no directors willing to be directors when they can be found culpable and responsible for wrong doings or frauds under their watch. Can you believe that? All the directors are being paid humongusly and many will form a long queue to be one and some are claiming that there would not be any around if they are made to be accountable for negligent or wrongdoings? Who is kidding who.

As for derivatives and other high risk financial products and instruments, they have become the opiate of the banking industry. Remove the derivatives and funny deals, where are the banks going to bring in the big profits to pay the big salaries? So how?

Piyush called for a code of conduct to regain trust by doing the right and proper thing, by being not only responsible to the shareholders, to themselves but also to the public and society. This is a tall order, an aspiration, but unlikely that something will be done or anything will be done in this vein. The stakes are too high and the profits of banks will fall sharply to ground zero.

The whole banking industry needs a big overhaul. How and who is going to do it?

12 comments:

  1. This comment has been removed by the author.

    ReplyDelete
  2. Singaporeans are so shaped by PAP that very few today are aware how banksters are loath hundred years back, and in Germany until 1945. The Bible and Koran resented banksters for very good reasons.

    Shakespeare Merchant of Venice depict a typical banksters. Bankster job are parasitic in nature. What does bankster produce other than shuffling papers and creating toxic derivative?

    While banks elsewhere have make some contribution to financing production, in Singapore, most loans go to property, creating speculating bubbles, interpreted as so call economic growth by PAP.

    Today, all economics students know nothing about Adolf Hitler Nazi economics. I took great pain to study the miracle Hitler did form 1933 when he ascended to 1939.

    When Hitler got power in 1933, Germany was the most broke nation in the world, people are unemployed, inflation are rampant. At 1939, Germany was the most powerful nation in Europe and there are full employment. Today Obama still cannot solve USA problem even though Hitler shown everyone the way.

    To put it short, Hitler ruled Germany with socialism and rein banksters.

    Recently Iceland show us another economic miracle. In 2008, Iceland was more shit than PIIGS, namely portugal, italy, ireland, greece, spain. Today, Iceland is stronger than most of the countries in Europe.

    Iceland president pull this off because they decided to go after the banksters, prosecuting their crime instead of bailing them out.

    See what Iceland president say in Davos 2013.

    Unfortunately PAP inherently are bunch of bloodsucking shylock. Today most people in cabinet are either banksters, or landlord or SAF mercenary. To name a few

    1) Heng Swee Keat, central banker

    2) Tharman, central banker

    3) LKY, LHL, kwa family is father of FX in OCBC, Kuan Yew grandpapa prosper by working as skipper for opium king Oei Tiong Ham.

    4) Teo Chee Hean, father Teo Cheng Guan chairman OCBC

    5) Ng Eng Hen, family bloodsucking landlord

    6) Tan Chuan Jin, mercenary

    7) Chan Choon Sing, mercenary

    8) Gan Kim Yong, landlord @CEO natsteel properties

    9) Grace Fu, UOB bankers

    10) Lui Tuck Yew, mercenary

    Thats y our students and young couple must be put to debt. Our first generation PAP has fewer of these scum, thats y we developed.

    The reasons why China is able to developed is because most of its politburo are engineers.

    Today, we see people wearing smart tuxedo in Shenton way. Girls wanted to marry them. These people stayed in big house and posh condos. We have degenerated.

    The Iceland realize that to be free and happy, they got to do away with all those pretty boys and girls in their financial CDB.

    Germany knew it in 1933.

    USA knew it until Woodrow Wilson corrupted the nation by opening FED.

    ReplyDelete
  3. Piyush Gupta also alluded to the changes in the regulations which are punitive to funding. Adequate financing -- for large projects and micro financing for small enterprises -- is required for everything to work properly so that businesses can function, customers can be served and workers can have jobs.

    If "reform" is on the cards, Singapore banks should tell the rest of the world to fuck off with their stupid regulations, and go it alone. Very soon other banks in other cuntrees will break away and a new coalition can be formed.

    Singapore banks are loaded with hardworking saver's cash. Very strong position.

    ReplyDelete
  4. Many people do not take seriously the documentary 'The Money Masters' which already tells us that bankers are the least trustworthy humans.

    I do not think much will change with overhauling. It is just the same old system wrap in new package that they will sell as overhauling. The same old people overseeing the same old fraudsters or the same old pigs still drinking from the same trough. The trust can never return once it is lost. Same with politics.

    ReplyDelete
  5. I don't like governments. I don't like banks.

    However, I think people in Singapore are lucky.

    Both the governments and banks are IMO the "best" out of a very bad bunch -- considered globally of course.

    I would much prefer to deal with the Singapore government or Singapore banks than the clowns we have running Australia, and the assholes running the big-4 Australian banking cartel.

    Tip for overseas Singaporeans living in Oz: keep your funds and businesses offshore as much as possible. You keep your shit here, one day they'll tax and/or regulate you. Australia is exactly like a centrist EU cuntry -- tax, regulate, busy-body, nanny-state...to many expensive hurdles to clear.

    Give me the PAP anyday lah. At least I can read them. I know how they think, and what they are going to do. Plus they are likely to stay in power a long, long time.

    You think I'm talking out my ass? No problem. Just ask the tens of thousands of entrepreneurs who have registered their companies in Singapore. Why do you think they do that?

    Pro-business government, stable and efficient environment, low taxes, minimal regulation...you can essentially do whatever the fuck you like (legally), and that suits me fine.

    So reform the banks lah. Hurry up. Between 2018 and 2020 I want to start a hedge fund. In Singapore. Small funds -- no license requirement.

    The best regulation is no regulation :-)

    Running a fund in my hotel? What an awesome, rocking idea!

    ReplyDelete
  6. I love putting my money in OZ banks cos they paid better interest than the lousy sinky banks. The sinky bankers suck all big time. Not only they need reform, they need to kick out all the ahnehs with their twisted tongues and two head snakes thinking.

    PAP is destroying the trust people have with the gov. THis makes things difficult for any new party to take over.

    ReplyDelete
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