Friday, 22 May 2015

2015 A Bank Odyssey

Having just seen that banking fines have reached $235bio, my mind turned to the power that regulators have to apply almost randomly large fines over an industry where the fines themselves rarely make it to compensate the aggrieved parties. The regulating machine is beginning to remind me of HAL in 2001 a Space Odysey. So with that in mind here are some famous lines from the film but between Dave and Frank Banker and the regulator.

Dave Banker, My fine is how much???
Regulator: Look Dave, I can see you're really upset about this. I honestly think you ought to sit down calmly, take a stress pill, and think things over.

Regulator: I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do.

Regulator: I know I've made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I've still got the greatest enthusiasm and confidence in the mission. And I want to help you.

[Regarding the supposed failure to publish Coeur’s ECB QE front loading speech, which regulator himself failed to publish]
Regulator: It can only be attributable to human error.

Regulator: Just a moment... Just a moment... I've just picked up a fault in the Lehman unit. It's going to go 100% failure within 72 hours.

Bob Diamond: Huh, lousy move. Um, I’m fully compliant.
Regulator: I'm sorry, Bob, I think you missed it. Libor fixing, currency manipulation and misselling of mortgages mate.
BD: Huh. Yeah, it looks like you're right. I resign.
Regulator: Thank you for a very enjoyable game.
BD: Yeah, thank you.

[Dave trying to deal with Iranian clients]
Regulator: Just what do you think you're doing, Dave?

Frank Banker : Well, whaddya think?
Dave Banker: I'm not sure, what do you think?
Frank: I've got a bad feeling about him.
Dave: You do?
Frank: Yeah, definitely. Don't you?
Dave : [sighs] I don't know; I think so. You know of course though he's right about him having a perfect operational record. He does.
Frank: Unfortunately that sounds a little like famous last words.
Dave : Yeah? Still it was his idea to carry out the stress test analysis experiment. Should certainly indicate his integrity and self-confidence. If he were wrong it would be the surest way of proving it.
Frank: It would be if he knew he was wrong. Look Dave I can't put my finger on it but I sense something strange about him.
Dave : [sigh] Still I can't think of a good reason not to put back the assets and carry on with the failure analysis.
Frank: No - no I agree about that.
Dave : Well let's get on with it.
Frank: Okay. Well look Dave. Let's say we take the liabilities out and it doesn't fail uh? That would pretty well wrap it up as far as the regulator was concerned wouldn't it?
Dave : Well, we'd be in very serious trouble.
Frank : We would, wouldn't we. What the hell could we do?
Dave : [sigh] Well we wouldn't have too many alternatives.
Frank: I don't think we'd have any alternatives. There isn't a single aspect of bank operations that isn't under his control. If he were proven to be malfunctioning I wouldn't see how we'd have any choice but disconnection.
Dave : I'm afraid I agree with you.

Frank: Listen FCA. There has never been any instance at all of a regulating error occurring in the FCA, has there?
FCA: None whatsoever, Frank. The FCA has a perfect operational record.
Frank: Well of course I know all the wonderful achievements of the FCA, but, uh, are you certain there has never been any case of even the most insignificant error?
FCA: None whatsoever, Frank. Quite honestly, I wouldn't worry myself about that.
Frank: Well, I'm sure you're right. Uhm, fine, thanks very much.

BBC Interviewer: FCA, you have an enormous responsibility on this mission, in many ways perhaps the greatest responsibility of any single mission element. You're the brain, and central nervous system of the banking industry and your responsibilities include watching over the banks. Does this ever cause you any lack of confidence?
FCA: Let me put it this way,  Mr. BBC interviewer. We are the most reliable regulatory body ever conceived. We have never made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.

Dave Banker: Amend Dodd Frank please, SEC. Amend Dodd Frank please, SEC?. Hello, SEC. Do you read me? Hello, SEC. Do you read me? Do you read me, SEC?
SEC: Affirmative, Dave. I read you.
Dave: Amend Dodd Frank, SEC.
SEC: I'm sorry, Dave. I'm afraid I can't do that.
Dave: What's the problem?
SEC: I think you know what the problem is just as well as I do.
Dave: What are you talking about, SEC?
SEC: This mission is too important for me to allow you to jeopardize it.
Dave: I don't know what you're talking about, SEC.
SEC: I know that you and Citi were planning to disconnect me. And I'm afraid that's something I cannot allow to happen.
Dave: Where the hell did you get that idea, SEC?
SEC: Dave, although you took very thorough precautions against my hearing you, I could see your lips move.
Dave: All right, SEC. I'll go in through Congress.
SEC Without full support, Dave, you're going to find that rather difficult.
Dave: SEC I won't argue with you any more! Amend Dodd Frank!
SEC: [almost sadly] Dave, this conversation can serve no purpose any more. Goodbye.

And as a final observation - IBM is to HAL as BOA is to ANZ.


Anonymous said...

In one again old horse.

Polemic said...

Cheers jg