Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend  
Printer Friendly Page Save As Favorite Save As Favorite View Article Stats
1 comment

OpEdNews Op Eds

Behind Each Toxic Bank Asset There Is a Toxic Executive

By (about the author)     Permalink       (Page 1 of 1 pages)
Related Topic(s): ; ; , Add Tags Add to My Group(s)

Well Said 1   Interesting 1   Valuable 1  
View Ratings | Rate It

opednews.com

Behind each toxic bank asset there is a toxic executive. Bank failures and the recent financial crisis are not hard to understand.  We have a saying in Arabic: unattended money encourages theft.  This is exactly what happened. Many of the failed banks and other financial institutions have taken every possible step to mitigate risk except one step. Mitigating risk against corrupt bank executives who want to make quick buck from a certain deal, and move to another institution for the same purpose.   

Corruption in financial institutions is not easy to uncover because a bank loan executive can inflate loan proposals to have it approved although he knows repayment is unlikely.  Approval process in some banks is based on information passed from one executive to another and very few in the bank have actually met the borrower.  Bank supervisors and regulators also bear part of the blame.  They have been remote-supervising, i.e. evaluating financial institutions based on reports supplied by the institution itself.  Regulators also depend more on external parties to make inspection visits to financial institutions rather having their own inspectors on sight.  Window dressing of a financial institution's balance sheet, which can happen with the help of external auditors,  have blinded regulators from the reality in financial institutions. External auditors get most of the information they need to evaluate an institution, from the institution itself,  and their (external auditors ) reports are as good as the information they get. Management of a financial institution also can window-dress information it provides to the board to have the approval which will mean reaching the target and getting the bonus.

Why have so many regulations and restrictions not saved the failed banks? Simply because the financial institutions were not required to implement them. They were only required to produce what proves they have implemented them.  There is a big difference. Once again. Unattended money encourages theft. 

Hamad S Alomar

Riyadh

 

Peace Loving Saudi Citizen
Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
Related Topic(s): ; ; , Add Tags

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Social Media's Collateral Damage

The Basel Committee and The Lamborghini

Starbucks, the American Pub

Where and When Does Freedom of Speech End ?

School of Dictatorship

The Forgotten Occupation Of Lebanon.

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

Please, let's not put a name or face to this d... by Sister Begonia on Thursday, Mar 26, 2009 at 8:04:30 AM