The recent announcement that the Bank of England considered £75bn of quantitative easing (Telegraph, 19 th October) raises the question of ‘what impact is £75bn going to have (a second round of quantitative easing) when so much has already been put into the nation?’. As I previously discussed, we face the problem of this money sitting static with the funds and banks rather than being invested on infrastructure projects which the nation so badly needs.
Is there now going to be Government pressure that will force the banks to distribute funds, particularly to small business, to revitalise the economy and increase employment? I suspect not! Will the government split retail banks from investment banks, so that the investment banks can take risk but without affecting everyone else and the retail banks provide the slow and steady platform that is needed? I don’t think this [...]

An interesting article by Martin Wolf draws attention to that fact that Britain must escape its longest depression – a depression which has continued as long as, if not longer, than the depression of the 1920’s. The question is, how? There is without doubt a parallel with the 1920’s; when the banks stopped lending money to each other, we saw the collapse of the financial structure, which is fundamentally the issue now.
If we as a country are going to continue to invest in the short-term transaction instruments, then I think we will see another financial collapse within four to five years. However, if we changed our philosophy and started investing in long term infrastructure projects, socialising the capital that we have, then we would have a situation of full employment, far less poverty and an overall wealthy society. But is there any sign of [...]

The Walker report is a lowest common denominator response to addressing corporate governance at UK banks. We need a deep overhaul of the financial system: much better regulation, longer-term thinking, and a break up of the investment banking mindsets which led to the financial crisis.
Giving non-executive directors more powers, scrutinising how they are appointed, or increasing regulation alone will make absolutely no difference.  Non-executive directors already have the powers; it’s the culture of investment banking globally which must change.
Non-executive directors must spend more time understanding the bank on whose board they sit.  They have to understand the culture, get to know the key managers in the bank, and spend more time in the bank appreciating the way business is done there.  Banks also need to spend the resources to ensure their non-executives become familiar [...]

People are looking far and wide to identify the causes of the financial crisis. I recently described how a failure of policy design was one of the factors that lead to the financial crisis. Another factor that has been discussed widely is the role of business schools in creating the leaders who ostensibly brought on the crisis. Have these universities not fostered a proper sense of accountability and responsibility, and should they be teaching ethics? [...]

Let’s take a look at the corporate strategy of the large financial institutions that played an instrumental role in bringing on the financial crisis. The chief executives at these companies tended to favor an aggressive leadership style, which for a long time led them to aggressive growth; as they acquired companies, the largest companies became ‘financial supermarkets’ with a whole range of services. These financial institutions grew and grew, but eventually reached a point around 2004 where their growth stopped. The leadership of many of these companies started to be criticized for not integrating their acquisitions well. And so chief executives responded by making their companies more governance-oriented, with new constraints for things being signed off by teams. These new protocols and procedures made the financial institutions stabilize and stop growing, but they didn’t prevent the financial crisis, and the whole sector is now suffering as banks (and [...]

Earlier this month as a reaction to the global collapse of the financial sector, the members of Parliament made BBC Business Editor Robert Peston defend his reporting on Northern Rock last year. Peston outlined that he was acting on his duties as a reporter and was not responsible for creating a panic by highlighting the deficiencies of Northern Rock and Bradford & Bingley. He’s quite right. How can a conscientious investigator cause a panic when in fact the system in which we work has such glaring deficiencies?
It is absolutely right that the press and the media should bring to the surface the social issues that we face, particularly one as worrying as the collapse of the financial system. I can see why MPs would wish to take the line of blaming greedy and selfish bankers and an insensitive press and media. The reason we [...]

The American auto makers are rapidly becoming another casualty of the financial crisis. However, the financial crisis is not the sole reason for their downfall; we need only look to Toyota and other non-American auto makers to see that–while not thriving, these non-American car companies are at least surviving the downturn without any government handouts. [...]

Is the global financial crisis motivating people to seek extramarital affairs? Anecdotal evidence from FT columnist Lucy Kellaway suggests this is the case . In the process of doing research for a novel, she found that the adultery-enabling website Illicit Encounters has seen a 300% increase in registrations from London-based men in the financial sector since September. [...]

Last month the US government’s National Intelligence Council released a new report on the role of the US in the world in 2025 . The report discussed the nature of superpower strife involving the rise of China, the shift of wealth and power from west to east, the increased likely use of nuclear weapons and the reshaping of America. I believe that all these issues are ‘accurate’ and are likely to have a profound impact on the world over the next 20 years. However, one critical factor was overlooked. [...]

Today it was announced that the seven highest ranking executives at Goldman Sachs will not be taking their bonuses this year . It’s an good move and will generate some positive publicity for the firm, especially because they announced their decision before other banks and before bonus season starts in earnest. Likewise, such a move was almost a necessity given the potential for public outcry if multiple executives were receiving bonuses worth over $50 million each after the company was one of the 9 banks that shared a $150 billion cash injection earlier this fall.
This move reminds me of some of that activity that Linda Lee Davies, Nada and I found in our recent book Leading for Success . One of the seven sides of great leaders we identified was ‘finding ways through.’ In the chapter dedicated to that subject, we said: [...]