Andrew Sheng, Chief Advisor to the China Banking Regulatory Commission, has a scathing commentary on Caixin Online-Bankers Confirm Wall Street’s Barbarianism.
US banks should be very concerned about what he says, both for their future business prospects in China as well as for his calls for an Asian investigation of their business practices. Some of Mr Sheng’s choice quotes:
In emails among themselves, the traders flaunted the fact that their products were crap. Thank you, Wall Street, for such honesty after the fact. We Asians bought some of that crap, thinking you were selling safe products.
I think Asian financial regulators should look into how many of these products were sold in Asia.
Wall Street’s culture is all about treating clients as suckers, because adults are supposed to know what they’re doing. But some of these adults are local government treasurers, or managers of corporate, pension and insurance funds, who did not fully understand that these well-dressed, highly educated and trusted Wall Street bankers were selling toxic products. Unfortunately, taxpayers and savers are now paying for this gross dereliction of fiduciary trust.
The highly paid bankers just don’t get it. Why should they? They have already laughed all the way to the bank with fat bonuses. The man in the street can expect such behavior from street gangs, but not from revered bankers. They are supposed to be the crème de la crème of society. Our children actually aspire to join them. God help them.
It is hard to imagine that the public exposure of some of the seedier practices will not affect the Chinese government’s recruiting of overseas financial talent, as I discussed in an earlier post.
And isn’t it sadly ironic that American banking regulators seem to have abdicated truth-telling to a Chinese regulator?