Transparency: it is the only thing that banks CANNOT afford

Time for a reality check methinks!

Retail banking in the UK is not competitive enough, a Commons Treasury committee report has concluded.

The cross-party group of MPs said there was a lack of price transparency between current accounts at different banks and it was too difficult for customers to move their accounts.

The committee said similar barriers existed for small business customers.

The British Bankers’ Association said the industry was working with regulators to improve competition.

via BBC News – Retail banks not competitive, says Treasury committee.


BBA aren’t even apologists for a morally bankrupt and financially corrupt industry. As the “clever” words form and lips move the lack of any soul or remorse is consistently betrayed by the dead-eyed delivery of an organisation, well versed at lying without conscience and defending the indefensible.

Why no culture of customer service?

In true Freakonomics style: How many drug dealers have you heard of who have a mission statement or customer charter?

Why invest in engendering loyalty when customers armed with the facts can be so demanding and fickle? Alternative: tap in to the pop culture for instant gratification. Create dependence by selling the lie of “financial independence”. There may not be much difference in the upfront cost of either but dependence is far more lucrative (call the tune and watch ’em dance!) and even more reliable than inertia.

After all, the last thing you would want is a level (or transparent) playing field because the only person that benefits is the “user”.

The “dope squad” (or FSA) turned a blind-eye to the activities because it paid them and their paymasters to do so and their pay-off was sufficient to fuel the myth of prosperity whilst funding a Public Sector spending spree! Read more of this post

Benoit Mandelbrot: The “heretics” are taking over the asylum

Benoît Mandelbrot at the EPFL, on the 14h of M...

Image via Wikipedia

Thankfully the times have changed and, much as they have resisted, institutions are finally getting the message that they can no longer get away with marginalising or burying the theories and other creative contribution of passionate and capable individuals whose work draws conclusions that challenge the very basis of their power and wealth.

Issues that were once buried or “swept under the carpet” are having to be dealt with because thinking citizens have the means to communicate (like never before) with like-minded individuals. Questions have been and will continue to be asked and for as long as Government; Church; Corporation; Financial institutions, are shown to be so deeply flawed and refuse to embrace transparency they are contributing to their own downfall.

So, unless I am a complete idiot(!) the message in this – 11 min – interview is that the whole basis of “efficient market theory” and, therefore dirty big chunks of time and money associated with modelling risk, were obtained by what can only be described as a massive deception? Well, if we are talking about deliberately and knowingly ignoring the the impact of infrequent (random) major “events” – Black Swans – on the basis that the truth was too inconvenient then what other conclusion can there be?

When it comes to interview style he ain’t no firebrand like Nassim Taleb but then again neither was the late Peter L Bernstein. But both men possess the wisdom and presence of another era with enormous relevance for NOW. NOT rebels and NOT heretics.

Benoit Mandelbrot on Risk, Efficient Markets, and Bachelier

Pt 1: In a fascinating in-depth interview with John Authers, investment editor, 85-year old mathematician Benoit Mandelbrot discusses his now 40-year old groundbreaking critique of the “efficient markets” hypothesis and why new theories on price movement discontinuities are needed after the credit crunch. Benoit Mandelbrot is an emeritus professor of mathematics at Yale University.

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