Send in the girls to clean up money men's mess
A Landsbanki sign on the side of a car outside the Icelandic bank's offices at Beaufort House in London. The Icelandic government has dispatched a pair of women bankers to deal with meltdown at two of their country's bank
Send in the girls -- that should insure a thorough clear-out and clean-up of our compromised banking network. In the face of banking meltdown, the Icelandics have shown some initiative and dispatched a pair of women bankers to deal with meltdown at two of their country's banks.
Iceland, once known as a substantial banking system with a little country attached, is relying on a fresh approach to straighten things out.
Amid international bailouts, recapitalisations and near-nationalisations, the news of female involvement in disentangling the mess is the first development to give me hope.
Let's follow Iceland's lead. Financial Regulator Patrick Neary is currently putting together a panel to wade through our banks' loan books. Scary territory -- I hope he has a number of sensible women in his line-up.
Neary's marshals must be a crack team because these bankers are no slouches when it comes to covering up their complicated deals.
The Financial Regulator is a policymaker, not a dealmaker, but we need experienced bankers checking through the loan books. Each individual deal will have to be scrutinised and there are thousands of them, dating back years.
Transparency
A senior banker admitted privately to me he doesn't believe the regulator has the capacity to sift through the morass of loans; an undertaking that requires not just manpower but brainpower -- and plenty of experience at the banking coalface. Liabilities are cloaked in devious ways -- the team need not expect transparency.
When his team pull on their flak jackets and go in, it will be the regulator's first real sense of what's been bubbling away inside the financial institutions. The core issue is this: Irish banks have lent a massive €39bn for speculative property development; of that €24bn is secured on assets which can be sold -- but €15bn is secured directly on the properties. That is the most vulnerable part of the bank's loans.
The task for the regulator is to assess how much those properties have fallen in value, and how exposed the Irish state guarantee leaves the public purse.
What a pickle. And men running amok in an era of unbridled financial capitalism have landed us in it.
Now let's see if women, or at least people with new insights, can be involved in gathering up the pieces, fitting the jigsaw back together and establishing a system of checks and balances to prevent the boys going on any future rampages.
I want women drawn in because women tend to be cautious.
I'm not saying all women are prudent (Sarah Palin is about as prudent as a cruise missile). But women are generally less prone to risk-taking than men. They're ideal bankers, in fact.
Somewhere along the line, the idea of what constituted a banker became muddied. Being sensible and far-sighted was no longer desirable.
Instead, successful bankers were the giddy ones who gambled. Who climbed in over their heads. Who built a house of cards, adding yet more storeys to it -- then expressed surprise when it toppled.
It was a sport for them, this money-making business. They earned paper profits and partied on the back of them. They were out of control.
And their bosses, far from reining them in, rewarded them for being wild and rash. So long as profits were increasing, nobody cared if the system was sustainable.
It was utter folly. It was hubris. And senior bankers remain in denial. I'm bewildered that nobody has been held accountable and that there have been no sackings -- at least in Britain four heads have rolled.
A freeze on bonuses and dividends is nowhere near penalty enough against those who supervised such excesses.
There was too much greed and not enough fear in the financial sector, as former US Treasury secretary Lawrence Summers put it.
Women can be greedy too, but they also worry about consequences. Testosterone-overladen men don't. Worry is for wimps.
Banking -- in common with other industries -- has had an obsession with making the figures look good.
Chief executives who delivered on the balance sheets were allowed to earn ludicrous salaries by board members and shareholders.
The culture was predicated on improved performances each quarter and on swollen profits being continually returned. In such a climate, highly aggressive risk-takers succeeded and reached the upper echelons.
In short, the biggest, noisiest apes in the jungle were promoted. And they made monkeys out of us.
That's why we need proper regulation. Intensive regulation. By people who understand the difference between right and wrong, and that consequences have repercussions.
When this crisis eventually dies down, its enduring legacy will be a lack of public trust in the banks. People will not soon forget what they put us through.
Nor that when we were pushed to the brink, their chief executives and chairmen had the luxury of golden parachutes.
I'm incensed by that self-regarding line they keep trotting out about how top salaries had to be paid to attract top people -- we haven't had top people, have we?
We've had irresponsible blame-shifters who don't deserve to be in charge of corner shops, let alone large financial institutions.
www.martinadevlin.com mdevlin@independent.ie
