People are, and have always been, able to persuade themselves to believe the weirdest things. If a theory is not testable then it is either rejected or it becomes a matter of belief, which people can be readily persuaded to accept and even proclaim with varying degrees of conviction. Economic theory is by no means [...]
Kweku Adoboli lost some $2.3bn for his employer, Swiss bank UBS. A couple of years ago Jérôme Kerviel lost over $6.5bn for Société Générale, while a dozen years back, Nick Leeson cost Barings $1.3bn and their independent existence. In all, around $10bn of losses were accrued by these three nice young men who were no [...]
Former UK Chancellor Alistair Darling’s memoir describes Gordon Brown’s approach as ‘a shambles’. As illustration, the much quoted description of a speech by the former Prime Minister about “neoclassical endogenous growth theory”. Brown started before the speech was fully written, so that part way through delivery, “a hand appeared from behind a curtain and handed [...]
The Independent Commission on Banking (ICB) is expected, when it reports next Monday, to recommend ring-fencing investment banking (the speculative ‘casino’ activities) from the traditional bank role supporting the real economy. The aim of ring-fencing is said to be to ensure the government never again has to use tax payers’ money to bail out the [...]
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