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>Australia's scandal-plagued financial sector is at the centre of a national inquiry into misconduct. Is there a country on this planet where the financial sec

>Australia's scandal-plagued financial sector is at the centre of a national inquiry into misconduct. Is there a country on this planet where the financial sector is not scandal-plagued? It is a serious question, with a cynic undertone, still, seriously: is there one? Can a "financial sector" work properly?

Arnt 8y ago
Define a threshold for proper function and look around you. If all you read is breathless headlines and agitated facebook postings the world may look black, but sit down, define thresholds and then judge the financial sector by what you've decided is appropriate. Money is transferred reliably and quickly? Bank accounts are safe, and the insurance banks need to pay is and remains cheap? Salescritters never offer "high-interest low-risk" investments? Define your threshold.
- mrleiter 8y ago
  The threshold would be the law.
  - Arnt 8y ago
    So you're not interested in scandals of the form "bank sold foo bar to pensioners as being a risk-free high-interest investment"? There are a few tens of thousands of banks in Europe that haven't been in trouble with the law. By your condition, the number of banking scandals in my home country (Norway) is either zero or one since I was born, and that possibly law-breaking scandal involved nine or ten customers (they asked the regulator once and assumed that the answer applied to nine similar deals). The world outside the Garden of Eden doesn't really get much better. The low cost of account insurance in most of the world tells a similar story: banking largely functions, even if not without warts and mishaps.
pandapunchpower 8y ago
I suspect those that are not scandal plagued fall into one of three buckets. 1) The banks face wide ranging, competent and impartial oversight and they know it. Unsure this exists but its theoretically possible. 2) The government is directly involved in bank activity so there is no one impartial to investigate scandal-worthy behavior. 3) The government and the banks are separate but bank oversight is negligible or ineffective. This causes scandal-worthy behavior to go unnoticed. I suspect scandal free countries largely fall into category #2 and #3.
- mrleiter 8y ago
  That would be somehow sobering. There is another option: a small bank that does not trade derivates and where people within know the customers not only by an excel sheet [1]. But then again this is impossible to scale. It's still nice to see. [1] https://translate.google.at/translate?hl=en&sl=de&u=https://www.nzz.ch/wirtschaft/eine-kleine-bank-in-der-emmentaler-taiga-ld.1370910&prev=search https://translate.google.at/translate?hl=en&sl=de&u=https://...
  - noxToken 8y ago
    > where people within know the customers not only by an excel sheet Unless you don't count individual actions, this is probably nonexistent. My hometown had a very small regional bank with roughly 3 branches total. One manager was caught skimming funds out of the vault. She was responsible for the closing amount at the end of the day, but she didn't know that there was another person who double checked behind her. The other was someone who was skimming funds from deployed military and fixed-income retirees. I don't recall the exact process for deployed military, but it involved removing extra funds from their accounts when an auto-pay transaction (wireless bill, mortgage, etc.) hit. I don't know the details like if she somehow bumped the transaction amount or added a small transaction fee. The fixed-income retirees was simple. When an elderly person came in to cash a check, she would palm a bill or two and short the customer.
sseth 8y ago
They are working "properly". Living on the edge of what the law allows and sometimes going over it is a feature, not a bug, unfortunately.

Arnt 8y ago

Define a threshold for proper function and look around you. If all you read is breathless headlines and agitated facebook postings the world may look black, but sit down, define thresholds and then judge the financial sector by what you've decided is appropriate. Money is transferred reliably and quickly? Bank accounts are safe, and the insurance banks need to pay is and remains cheap? Salescritters never offer "high-interest low-risk" investments? Define your threshold.

mrleiter 8y ago
The threshold would be the law.
- Arnt 8y ago
  So you're not interested in scandals of the form "bank sold foo bar to pensioners as being a risk-free high-interest investment"? There are a few tens of thousands of banks in Europe that haven't been in trouble with the law. By your condition, the number of banking scandals in my home country (Norway) is either zero or one since I was born, and that possibly law-breaking scandal involved nine or ten customers (they asked the regulator once and assumed that the answer applied to nine similar deals). The world outside the Garden of Eden doesn't really get much better. The low cost of account insurance in most of the world tells a similar story: banking largely functions, even if not without warts and mishaps.

pandapunchpower 8y ago

I suspect those that are not scandal plagued fall into one of three buckets. 1) The banks face wide ranging, competent and impartial oversight and they know it. Unsure this exists but its theoretically possible. 2) The government is directly involved in bank activity so there is no one impartial to investigate scandal-worthy behavior. 3) The government and the banks are separate but bank oversight is negligible or ineffective. This causes scandal-worthy behavior to go unnoticed. I suspect scandal free countries largely fall into category #2 and #3.

mrleiter 8y ago
That would be somehow sobering. There is another option: a small bank that does not trade derivates and where people within know the customers not only by an excel sheet [1]. But then again this is impossible to scale. It's still nice to see. [1] https://translate.google.at/translate?hl=en&sl=de&u=https://www.nzz.ch/wirtschaft/eine-kleine-bank-in-der-emmentaler-taiga-ld.1370910&prev=search https://translate.google.at/translate?hl=en&sl=de&u=https://...
- noxToken 8y ago
  > where people within know the customers not only by an excel sheet Unless you don't count individual actions, this is probably nonexistent. My hometown had a very small regional bank with roughly 3 branches total. One manager was caught skimming funds out of the vault. She was responsible for the closing amount at the end of the day, but she didn't know that there was another person who double checked behind her. The other was someone who was skimming funds from deployed military and fixed-income retirees. I don't recall the exact process for deployed military, but it involved removing extra funds from their accounts when an auto-pay transaction (wireless bill, mortgage, etc.) hit. I don't know the details like if she somehow bumped the transaction amount or added a small transaction fee. The fixed-income retirees was simple. When an elderly person came in to cash a check, she would palm a bill or two and short the customer.

sseth 8y ago

They are working "properly". Living on the edge of what the law allows and sometimes going over it is a feature, not a bug, unfortunately.