I have known Dr Choudhry for over a decade and he is the finest investment banker that I know. I don’t mean that as an insult either! Two or three years ago there would have been little risk that my comments could be construed as an insult, but thanks to a few bad eggs and a heap of misguided public attention ‘banker’ is a rude word and banking is probably the last thing a young graduate wants as a career. That is a loss for us all, and I’m hoping that this book will change the direction of a few bright young minds who are heading otherwise straight to Google or Apple.
It is widely assumed that bankers caused the recession. This statement is taken for granted, politicians talk as though this is a well-established fact and that bankers’ obscene bonus culture was the major driver. We have US senate hearings and UK government enquiries which move ahead on this assumption, all intent on fixing the banking bonus ‘problem’. The thing is, once one wades through the products, the terminology and headline rhetoric, one can whittle down banking to a very simple business: banks lend money. Blaming a banker for lending money is like blaming an accountant for adding up a column of numbers.
Banks lend money and in doing so they take risks. There are no guarantees that every borrower will pay back their loan. Rather than ascribing the financial crash solely to bankers, shouldn’t we also be asking why people stopped paying back their loans? The credit rating agencies gave many investment ...