If there is one thing that has become abundantly clear over the past year-and-a-half or so, it is how badly so many financial institutions — effectively, their senior executives — managed risk in the pursuit of short-term, turbo-charged profits.
Not only did they hand out loans like candy to a wide range of high-risk borrowers, they relied on all sorts of accounting chicanery and derivative machinations to further augment their returns in ways that seemingly did not make any allowances for the possibility that things could go even a little bit wrong.
Given all the red ink that has flowed through the financial industry in the wake of this far-reaching stupidity, grotesque incompetence and criminal negligence, why is it that so many of the managers responsible are still in charge of those firms?
In fact, incredible as it seems, the screw-ups are in many cases being allowed to preside over the allocation and deployment of myriad capital injections, cheap loans, and taxpayer handouts as if they were the innocent bystanders of a totally unexpected natural disaster.
Why Are The Screw-Ups Still in Charge?