Thursday 8 December 2016

Economics: Swimming with Sharks My Journey into the World of the Bankers by Joris Luyendijk

Guardian Faber €12.00

Published 11/07/2016 | 02:30

Swimming with Sharks - My Journey into the World of the Bankers by Joris Luyendijk
Swimming with Sharks - My Journey into the World of the Bankers by Joris Luyendijk

It is almost eight years since Lehman Brothers Bank collapsed. Wall Street's phenomenal unregulated greed was revealed in Michael Lewis's The Big Short, in 2011. Now, Swimming with Sharks brings the 2008 collapse into sharp focus in the UK. What began as over 100 interviews in the financial sector for Luyendijk's blog in The Guardian, is now a captivating insight into Planet Finance. Competitive, high-risk and highly-paid individuals were only too happy to break the code of silence once they could not be identified.

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Joris Luyendijk is a Dutch anthropologist and investigative journalist. He approached this commission with a very average knowledge of the sector, which gives his conclusion greater impact. Many of his interviewees, particularly women, graduated with degrees in history or politics. "Some of the best traders are now women," says one interviewee. "Trading is no longer a balls job. It's a brains job." As one female high earner said, all you need is 'self-belief'. When it comes to developing complex financial models, the more specifically qualified 'quants' (quantitative analysts) are the high priests of the City. The reliance on their sophisticated algorithmic models means these products are not only incomprehensible to outsiders but to many managers as well. I would add that they are quite incomprehensible to the ratings agencies too, remember it was Standard & Poor's who granted AAA status to toxic mortgage bonds bundled into CDOs (Collateralised Debt Obligation).

Luyendijk asks 'could it happen again?' After the Brexit shock to the City of London, the answer is probably yes, a different type of collapse for different reasons. With a supposedly more regulated banking system since 2008, it better be a soft landing this time.

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