The Financial Crisis Inquiry Commission is meeting today in Washington to hold hearings on the recent financial crisis and economic meltdown. The Commission will ask Wall Street’s top brass–Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JP MorganChase, John Mack of Morgan Stanley and Brian Moynihan of Bank of America–questions about what went wrong. What the Commission really needs to do is ask what is wrong with Wall Street’s entire culture of finance. The populist rage, from both left and right, at Wall Street is not due to specific actions taken by banks and bankers but at the rise of a speculative, short-term, transactional, culture that rewards individuals with enormous bonuses. This trading culture, over the past 15 years, has replaced a different financial culture which was relational, focussed on the long-term, investment, and, most importantly, aimed at economic growth for many stakeholders–corporations, employees, and the nation as a whole. The goal of the Commission, and of Congress, should be to replace Wall Street’s short-term, transactional, trading culture of finance with a long-term, relational, investment culture. This isn’t difficult
Excerpt from:
The Culture of Finance–Why Financial Innovation Failed