So Alan Greenspan, former Fed chairman and arguably one of the chief architects of the financial crisis we find ourselves in today, finally acknowledges that he “made a mistake” in rebuffing all attempts to regulate the derivatives market. He said today:
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”
Mr Greenspan — may I call you Al? — I have a little bit of news for you. Banks are not people. They don’t have brains, or consciences, or any sense of self-interest.Â As it turns out, banks are actually run by people.Â Collections of individual people, in fact, each whom often have a very well-developed sense of self interest. As in, an interest in themselves, not the bank as a whole. And unsurprisingly, Al, many of them saw an opportunity to do well by themselves, even if it conflicted with the long-term goals of the bank, or even the economy as a whole. As an S&P employee said to a coworker in 2006:
“Let’s hope we are all wealthy and retired by the time this house of cards falters.”
So let’s not anthropomorphize any more financial institutions, eh Al?