Monday, September 19, 2011
Rogue Traders: A Reflection of The Modern Society (Guest Post)
international Swiss bank, on suspicion that he lost $2 billion of
the bank's money in unauthorized trades. It's not the first time
something on this scale has happened. In 2008 a trader at
Société Générale, the giant French bank now so much in the
news, lost $6.7 billion of that bank's money in supposedly
unauthorized trades before he was caught.
My question is quite simple. If these traders had made billions for their institutions instead
My question is quite simple. If these traders had made billions for their institutions instead
of losing them, would they have been labeled "rogue" and handed over to the authorities?
I ask this question because it seems to me that what is being punished is not excessive
risk-taking, but rather excessive risk-taking that loses money. Almost nobody labels
risk-taking "excessive" if it results in a win. Then it is called "brilliant" or "gutsy" or "a
stroke of genius." And, people who take such risks get large bonuses and are promoted.
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