I'm chairing a panel session on shadow banking at Copenhagen Business School this morning. In the circumstances the revelation of email from Goldman Sachs, Morgan Stanley and others in the US about their compliance with naked short selling regulations is telling. Perhaps the best quite on the issue is this, from Rolling Stone:
Now, through the magic of this unredacted document, the public will be able to see for itself what the banks’ attitudes are not just toward the "mythical" practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.
"Fuck the compliance area – procedures, schmecedures," chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.
In other words, we'll do what we like, we don't care about the rules and we'll deny what we're doing, using the most expensiev lawyers money can hire if need be to do so .
I think that sums banking up.
It should be an interesting session, just as yesterday was on regulation, offshore and related issues.
Hat tip: Robert Palmer at Global Witness