"Weren’t you concerned about clients’ ability to repay their loans on worthless properties?"
"No, sir. We truly believed that by the time they defaulted on their payments, the lending banks would have gone bust."
A Nobel laureate's play in Hong Kong
4 hours ago
3 comments:
If, a few years ago the head of an investment bank was asked "Would your bank create a security which you called one of the 'cats and dogs' on your books; would you sell that security to your customers since you had decided it was not a good idea for your company to hold it; would you then short that security (betting that it would lose value) after selling it to them?
The answer, of course, would have to have been "No that is illegal/unethical/unprincipled/stupid."
Which it looks very much like what GS was doing in 2007.
Four people have been jailed for between 28 months and four years in connection with the fraudulent trading of derivative warrants and money laundering. The total amount involved was more than HK$100-million.
The court heard earlier that the fraudsters created a false appearance of active trading in derivatives through setting up dummy accounts. They then convinced a number of securities companies to give them favourable prices.
All you need to know about the "financial services" industry is that its members in Hong Kong chose a convicted fraudster as their LegCo representative. (That is also all you need to know about the "functional constituencies".)
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