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Express Your Views On A Couple of Topical Issues (Bonuses & Risk)

last updated: 28 February 2008
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Stonewall
DirectConnect July 08
There's been a couple of interesting opinions expressed by senior bankers this week. We'd be interested in hearing your take on them.

First up, it's risk. As The Financial Times points out, the huge writedowns taken by some of the world's largest firms recently has resulted in CEOs like John Thain (Merrill Lynch), Vikram Pandit (Citi) and John Mack (Morgan Stanley) taking a much closer interest in risk management. JPMorgan Chase boss Jamie Dimon even told analysts this week that 'it is not (a) risk manager's job. It is the boss' (meaning him) job to manage risk'.

What's your view ? How reasonable is it to expect CEOs to get involved in risk management in a hands-on and meaningful way, and to what extent can they actually influence what their traders and other risk-takers are doing ?

And The Guardian reports that Hector Sants, the CEO of UK markets regulator The Financial Services Authority, has suggested that there is a need for a major culture change at some of the big investment banks, as the way bonuses are currently paid simply encourages the taking of larger risks. Speaking on BBC Radio 4, Sants said that 'there is a risk that the remuneration systems are too short-term, and that they do incentivise behaviour which is not helpful in terms of maintaining long-term stability'.

Let us have your opinions on these subjects by using the 'Comment on this story' button immediately below.

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