Francis Vierboom's Blog

A blog about things. Mostly news, ideas, and Sydney

The poor old fat cat bankers

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A problem struck me a long time ago. I was in year five, on the excursion to Canberra that every primary school kid in Australia goes on. We visited the Royal Australian Mint, where Australia’s currency is manufactured, and, from behind the windows, we watched the people wheeling around gigantic bins full of two dollar coins. It looked like a lot of money then, and it still would now.

But I wondered in my head… how could you ever stop the people down on the factory floor from stealing the money? It looked so easy to just scoop a few hundred bucks off the top into your pockets! Sure, you could put someone in charge of checking the workers and counting the money. But then that person could just split the cash with factory workers. And so on all the way up the management chain to the prime minister. So how come all the money wasn’t just stolen?

The conclusion I came to was that the workers must just get paid a lot – far above the average person, definitely way more than my dad. Probably enough for a boat and a mansion, enough to make them pretty blasé about all that money. How else could you spend all day staring at millions of dollars and not end up stealing some?

Looking back, I presume that I underestimated the management and control processes in place at the Mint. It turns out it is not necessary to pay them like superstars (if you are interested, the Mint’s annual report including salary ranges is online). But I suspect I was probably right about something – about just how irritating it would be for your job to be to watch millions and billions of dollars float around if you weren’t getting paid much. And it’s what I think every time I hear stories about investment banker bonuses. If you’ve clicked a button to trade a billion bucks of shares before lunch, you’re probably going to be a bit annoyed if you’re not getting at least seven figures annually. Not that you necessarily should get it. But your greedy, indignant and opportunistically bolshie shoulder devil would probably think that.

Of course, if you want to take some of the cash that flows through an investment bank, it’s not just a matter of wearing pants with big pockets to cram coins into. But unlike the Mint, an investment bank is a place where the management chain actually IS happy to split it with you if you can figure out a smart and marketable way to nick some of your customers’ money. Which leads me to my favourite theory about what caused the financial crisis, from the NY Times a few months ago: smart people.

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Written by Francis

December 14, 2009 at 7:21 pm

Posted in Uncategorized

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