After the uncovering of what I called the MAD DOG AFFAIR involving over US$ 80 billion in alleged financial fraud we are again confronted by the further bad news of the STANDFORD alleged financial irregularities involving his small banking chain. Notwithstanding the small size of Stanford's banks the psychological blow on consumer confidence is not at all minor. The scandal has severely affected banking operations in South American ( Venezuela, etc. ) and there are also rumours of instability in the EU banking system as well. The latter development is especially worrying because it may lead to the collapse of the whole EU monetary system which is up to now still holding up reasonably well. If the worst should be proven true a second gigantic wave of the FT is poised to strike with even more devastating power because the delicate financial systems in EU countries have already been weakened by the first wave from the FT.
Unless we can master the MAD DOG and the like no complete recovery for the tattered global financial system is possible. There appears to be a lot of possibilities for collusion and even corruption involved because many big banks and financial houses are victims despite their usual prudence. Why haven't professional auditing practices and verification procedures detect the alleged fraud much earlier ? This big question has a huge bearing on the effectiveness of our regulatory system regarding the financial institutions. Are there gross negligence and even collusion involved at different stages of the whole MAD DOG scenario ?
Apart from the stricter enforcement of more effective financial regulations there is also the concern about the best way to avoid grey areas in the financial laws & regulations from being manipulated to the advantage of the greed of MAD DOG operators and the like. The ultimate solution has to be, as I said in earlier blogs, the attainment of a generally accepted but less materialistic value system in which pure financial rewards on efforts are not the sole motivating factor. Perhaps the raising of over A$ 120 million by private charities alone within a matter of 10 days of the Victorian Black Saturday ( 7th February, 2009 ) Bushfire disaster despite the FT will bring a positive message on the value of and the need to have a less materialistic value system for the global village.
JKHC.
Saturday, February 21, 2009
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> My comment is:
ReplyDelete>
> At difficult times, it is not division but unity that leads us through the
> storm. Dare I ask enterprises and conglomerates to play their righteous
> corporate citizenship roll by keeping interest of all their stake-holders,
> not only the shareholders, in their actions. Will shareholders be prepared
> to accept retaining all their employees at the expenses of lower level of
> dividends? At the same time, an across the board 10% payroll deduction, from
> top to the bottom, should be put in place and be reviewed in 12 months time.
> This will lead to a 'fight together' mood instead of a dispirited and
> disadvantaged group of victims that are more often than not having been
> fighting for survival at the bottom end.
>
> Frank
The above comment is from Frank but I copy & paste it on his behalf due to technical problems with his PC. Thanks again, Frank for your precious comments and support for my blog.
ReplyDeleteI totally agree with you Frank, on your views on modern day corporate responsibilities. The sole objective of maximizing shareholders' profit/equity which is very often misused by black sheep corporate custodians for the own selfish & greedy end is outdated. What is the first thing top management does when the slightest signs of a recession loom in the economic horizon ? They lay off loyal employees who the corporation's real assets. Does top management voluntarily cut their own remunerative package ? Not unless they have to beg Congress or their government for huge rescue package derived from hard earned taxpayers' dollars. Let us all keep these black sheep in check !
ReplyDeleteJKHC.