A History on Financial Crashes and Bubble Bursts: Part 1

In 2008 we witnessed a global recession that affected tens of millions of people worldwide. Names like Freddie Mac and Lehman Brothers, and terms like housing bubble, liquidity crisis, over-leveraged, commodity boom dominated global headlines. Stock markets worldwide lost trillions of dollars in value, banks worldwide collapsed and millions of people were eventually left homeless.…

Are Dashboards Necessary?

A Performance Measurement dashboard is an exceptionally useful system for measuring and visually reporting on key performance indicators. Combining key performance indicators with a dashboard better enables the organization to monitor, analyze and manage important business processes from numerous perspectives, impacting both organizational effectiveness and agility.

Moral Hazard: A Tempest-Tossed Idea

THE reports outraged America: In the wake of Hurricane Katrina, people who fled the ravaged Gulf Coast were spending disaster relief, paid for by taxpayers, on tattoos, $800 handbags and trips to topless bars.It turned out that few, if any, Katrina evacuees actually did any such thing. A vast majority used debit cards issued by FEMA to buy necessities like food and clothing. But the damage was done: FEMA swore that it would never hand out money like that again.

Are Accountants Homo Accounticus?

I enjoy maturity and evolution models of all kinds, especially for business. There is a stages of maturity model for information technologies and others such as for sales teams and their customer relationships. What I like about stages of maturity models is they provide confidence that regardless what stage one is at – low or high – there is a next step further up that can be attained in an evolutionary way.

The Problem with the Profit Motive in Finance

The Financial Services Roundtable, the lobbying group for the biggest financial companies in the U.S., has a new “white paper” out with the rah rah title, “Financial Services: Safer & Stronger in 2012.” A few of the bullet points:

•Banks insured by the Federal Deposit Insurance Corporation have $1.5 trillion in capital — the highest capital levels in the history of American banking.
• The largest U.S. banks have increased Tier 1 capital — the core measure of a bank’s financial strength from a regulator’s point of view — by nearly 50 percent over the last four years.
• Executive compensation has been reformed significantly to align with long-term performance.
• Banks have developed fortress balance sheets, improving credit quality by 54 percent, increasing net income and, restoring aggregate lending to pre-crisis levels of nearly $7 trillion.