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Theories: | Theories: | ||
====Disbelief-suspenders==== | |||
*'''Over-reliance on regulators''': we imagine regulators/rating agencies are better resourced, more powerful and more talented than they are. - assumed the SEC was doing its job | *'''Over-reliance on regulators''': we imagine regulators/rating agencies are better resourced, more powerful and more talented than they are. - assumed the SEC was doing its job | ||
*'''Credibility''': Connection to well-regarded community pillars - If George Schultz is on the board the company must be legit, right? We imagine community pillars have done their due diligence on our behalf? | *'''Credibility''': Connection to well-regarded community pillars - If George Schultz is on the board the company must be legit, right? We imagine community pillars have done their due diligence on our behalf? | ||
*''' | *'''Cult of personality''': A single Svengali, genius, Nobel prize-winners, NASDAQ chairmen, | ||
*''' | *'''This time it’s different''': A paradigm shift as part of the narrative. We’ve banished risk. The internet has changed economics forever | ||
*''' | |||
*''' | ====Nothing to see here folks==== | ||
*'''Sleepy backwater''': It’s a boring and unglamorous part of the operational network. No one’s taking any risks there: Libor, Kerviel, Abodolo | |||
*'''Weird whistleblowers''': The people who called it out were unglamorous, outsiders, easy to catagorise as cranks | |||
====Porkie Indicators==== | |||
*'''No errors''': no screw ups, no bad launches: everything is fine. Real companies have setbacks. Especially if defended with hostility - e.g., you threaten to ruin EVERYTHING with your questions. | |||
*'''The dog ate my homework''': Promised answers to your questions are delayed, derailed, lost or excused. There's an excuse for everything. The excuses are implausible/out of proportion with the question. (what's the most plausible explanation: The dog really did eat your homework or ---? | |||
====Cloaking devices==== | |||
*'''Micromanagement''': Single person unusually able to influence/control the narrative. | |||
*'''Secrecy''': Insistence on confidentiality not just of unannounced plans but of entire operation. Black box operations. | *'''Secrecy''': Insistence on confidentiality not just of unannounced plans but of entire operation. Black box operations. | ||
*'''Hostility''': combative/aggressive demeanour to criticism | |||
*'''This is different how?''': To what extent is “fake it till you make it” bravura, and how much is it confidence in your ability to sort it out later, or big opportunities. Is there a difference? | |||
====All is not well==== | |||
*'''High turnover''': Especially when combined with confidentiality. Workplace bullying etc. | *'''High turnover''': Especially when combined with confidentiality. Workplace bullying etc. | ||
*''' | *'''Who’s that guy?''': A position of unusual influence with a flaky backstory | ||
*''' | *'''A big problem is a small problem that hasn't grown yet''': Often big problems start out as small problems, where a well-intended patch didn't play out. How disciplined is your organisation with sweating the little stuff. and what of the trade off between “bureaucracy” and “discipline with sweating the small stuff”? | ||
====Correlation risks==== | |||
*'''Interconnectedness of red-flags | |||
With all the checks and balances in financial regulation, how did: | With all the checks and balances in financial regulation, how did: | ||
===Examples=== | |||
*[[Bernie Madoff]] get away with it? - Author Harry Markopoulous | *[[Bernie Madoff]] get away with it? - Author Harry Markopoulous | ||
*Nick Leeson | *Nick Leeson | ||
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*Libor | *Libor | ||
==Women in STEM== | |||
Does regulation work? | Does regulation work? | ||
- Netting | - Netting | ||
- Diversity | - Diversity | ||