Financial people may or may not be more likely than others to kill themselves after they’ve suffered a reversal, but there’s no question that they enjoy a reputation for doing so.
Disgraced politicians, disbarred lawyers, doctors guilty of malpractice, field-goal kickers who crush the hopes of entire cities...none of these people do we half-expect, after they fall, to find some high ledge to jump from. If you work with money you are thought to be, in this one respect, a bit less like any ordinary professional than a jilted lover or a misunderstood artist.
The question naturally arises in the wake of the recent suicides of Adolf Merckle and, especially, Thierry Magon de La Villehuchet. The latter, the 65-year-old head of Access International Advisors, lost millions of his own and even more of other people’s money by placing them with Bernard Madoff.
The New York Times quoted de La Villehuchet’s brother explaining the suicide as a rare act of honour in a dishonourable profession.
This was perhaps understandable; more surprising was when The Times’ reporters heartily echoed this sentiment.
De la Villehuchet’s attitude appears to be rare, they wrote.
So far, the leading players in Madoff’s case have maintained a stony silence, studiously avoiding apologies or statements of responsibility.
Suicide can be interpreted in many ways: as honourable, cowardly, sad, tragic, even as a matter of personal choice beyond the reach of moral judgement.
But as a practical matter, after a financier has killed himself, there is no noticeable decline in the sum total of responsibility in need of taking in the financial world. His death fixes no problems, restores no wealth, redresses no harm.
Just now the financial industry has a big responsibility-taking problem on its hands. Financial professionals have helped to create an economic catastrophe. They’ve made vast sums doing things that now can be seen to have had negative social value: misleading giant Wall Street firms; deluding their clients and themselves; allowing themselves to be duped by con men like Madoff.
No doubt many of them do not wish ever to shoulder the blame. Even if they did, how would they go about it?
Begin with what they shouldn’t do: make some great public display of how bad they feel, and how they have now seen the light.
The world once rewarded you for selling collateralized debt obligations, now the world might reward you for saying how much you regret having done so. The odds are pretty good that it’s the incentives, and not you, that have changed. The time to display your sincere disapproval of your own financially idiotic or destructive behaviour was back before they fired you, or cancelled your next three bonuses.
A better approach might be to accept that it is not easy, or immediately rewarding, to take responsibility. Forgoing this year’s bonus might be a start.
But that doesn’t account for the past five or more years of ill-gotten gains, and the trillions of dollars of economic losses caused by Wall Street’s fantastic misallocation of capital.
The Swiss bank UBS AG has come up with a better idea: give some of the money back. The former CEO of UBS, along with some of the bank’s other executives, agreed to repay bonuses they received based on the phony profits of the credit bubble. For very senior executives who made hundreds of millions of dollars, the act is obviously not merely just but useful, and even cathartic.
Just baby steps
But these are baby steps towards some more general redemption. The vast majority of the people who might feel a desire to take responsibility for their role in our financial catastrophe are out of the public eye and not in a position to give vast sums of money back.
Indeed, that’s partly the point: Most of the money that’s been lost is simply gone. If you are an ordinary Wall Street person—an architect of mezzanine CDOs, a rater of securities at Moody’s Investors Service—and are now wracked by guilt, how might you rid yourself of it?
There’s no obvious answer. It’s not easy for a financier to take responsibility in some meaningful, useful way. On the other hand, it wasn’t easy for him to cause the trouble for which he now needs to take responsibility.
Wall Street man has exhibited a fantastic ability to dream up solutions to problems, even when the problems don’t exist. Here’s one that does. Any thoughts?