Andrew Ross Sorkin of the NYT recently wrote this article on the ethos, or rather, the ethical atmosphere of the industry, as many Wall St institutions have claimed that their days of bad behavior are behind them.
Sorkin points out, however, a new study released by the University of Notre Dame (paid for by the Labaton Sucharow law firm) surveying nearly 1,200 traders, portfolio managers, investment bankers and hedge fund professionals says the exact opposite.
The article cites a ton of stats from the survey showing how nearly a third of respondents said they'd break the law to make more money, and the main takeaway Sorkin reports is that:
"Structurally, Wall Street firms carry much less risk than they did years ago. Capital requirements are significantly higher. Indeed, even the moniker 'Wall Street' has shifted as the power of the big banks has diminished and the influence of asset managers has increased. But when it comes to the ethos of the industry just as it is reaching pre-crisis levels of employment and compensation, whatever change has taken place remains an open question."
Do you think that maybe the Fed's reforms are too quantitative in nature, and are perhaps missing the underlying "cultural" problems (i.e., risk-taking behavior and comparable ethics)?
Any additional thoughts?
This article is pretty worrisome given the responses of the people surveyed. I would agree that the Fed's reforms are very quantitative in nature and therefore unable to address the culture of Wall Street. I don't know that it is the responsibility of the Fed to change the culture of Wall Street though. I think unless there are laws in place making specific individuals on Wall Street responsible for the risky banking behavior that they engage in that it will be hard to change the feelings of Wall Street professionals.
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