My late father worked for one employer his entire life and that was the state bank of Sri Lanka. During the middle portion of his career, he served as manager at various branches around the country and so we moved along with him every four or five years or so.
The thing about his job that required the most judgment was giving out loans to individuals and businesses. The bank had to make sure that the loans were properly secured and the money spent correctly. Having someone misuse or default on a loan that you had approved was considered a major blot on your career and so he and others like him were very risk-averse. As part of that loan process he would regularly go on what were called ‘inspections’ to the places where the loans were given to make sure that the work was being done as promised, and as a little boy I would sometimes accompany him, especially if the places were to the neighboring towns and villages. It was quite interesting to visit factories and farms and look at machinery and other form of inventory.
While he seemed happy at his work, it was not what you would call exciting. An important aspect of his job was to make sure that the bank’s books were kept orderly and ‘balancing the ledgers’ at the end of the day was the most tense moment since he would not go home until all the money had been properly accounted for. (He also viewed balancing his personal checkbook every month as of prime importance, a value that I picked up from him and to this day will make sure that it is correct to the last cent.)
This was a far cry from the casino-type atmosphere that exists in the current US and British banking sectors where huge sums are gambled on risky investments and that led to the financial crisis of 2008. Such activities are in the news again as scandal after scandal is revealed at places like Bank of America, HSBC, Royal Bank of Scotland, Barclays, and UBS.
Part of the problem is the revolving door connecting these banks to government regulatory agencies, which ensures that these risky and even criminal practices are unchecked. Matt Taibbi argues against having former investment bankers become heads of government banking regulatory agencies because they have the wrong attitude and that what we need is for banks to return to becoming the kind of institution my father worked for.
What the banking system really needs is a guy who will step in and force bankers to go back to being boring, risk-averse drips who lend businesses money to buy new equipment or fleets of trucks or whatever. What we have instead are coked-up wannabe big shots straight out of Boiler Room who are washing Mexican drug money and laundering Middle Eastern cash and playing around with wild price-fixing schemes – pretty much everything you can think of that isn’t quietly counting beans and helping grow the economy.
In other words, they need someone like my father.