Business
2008 Financial Crisis Deja Vu
Zanny Beddoes, Editor-in-Chief for The Economist, brings us back to the great financial crisis in 2008 and explains how we can learn from the past.
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@lambertois11
January 7, 2024 at 6:03 pm
Let’s talk about a subject that is rarely discussed: the system of bonuses for the bank management, especially for the investment banking. The bank bonus system is based on the profits at the end of the year. The managers are totally focussed on the short term. They become risk near-sighted; they do not care about the medium-term risk!
The best example to illustrate this case is the CEO of the defunct Layman Brothers. In the years prior to the collapse of Layman Brothers, the CEO has amassed 500 million in salary and bonus. He could care less about the future of Layman Brothers.
@praveenspike
January 7, 2024 at 6:03 pm
If a major bank buys a smaller one like SVB and merge with it, the possibility of customer security is higher and at the same time a defaulted smaller bank, investor to buy will be a lot cheaper compared to prior. E.g. HSBC bought SVB in UK for just 1 pound after it defaulted.
@glennnielsen8054
January 7, 2024 at 6:03 pm
It is interesting to hear that one thing that has not changed is that the world and its challenges are understood in hindsight.
@ayenewwolde4393
January 7, 2024 at 6:03 pm
this is absolutely true how long do we have to sugarcoat structural finacial problem in the sake of finacial stability.
@azzyyy734
January 7, 2024 at 6:03 pm
That man must be off his rocker if he thinks so.
@lijie2511
January 7, 2024 at 6:03 pm
Inflation is cancer.
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January 7, 2024 at 6:03 pm
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