Buffett’s method is to find well-run companies and give them more freedom than they would enjoy on public markets. Yet other conglomerates use financial engineering and impose “transferable” management skills.
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04 May 2016, Financial Times
13 April 2016, Financial Times
Recent stumbles by Bernie Sanders illustrate a misdirection in his attack on the banking establishment. The central problem is not so much “too big to fail” but “too complex to fail”.
17 February 2016, Financial Times
JPMorgan and Deutsche Bank account for about 20 per cent of total global derivatives exposure. The risks associated with these exposures are largely netted out. But how well? Your guess is as good as mine, and probably not much worse than those in charge of these institutions.
13 January 2016, Financial Times
In cases of fraud official action inevitably damages both the business and its share price, and no agency will be right all the time. Short selling hedge funds are not right all the time either, but when they are wrong they lose their own money.
25 November 2015, Financial Times
British regulators have finally published their report into HBOS, the bank formed from the merger of Halifax with Bank of Scotland, more than seven years after its collapse. The 600-odd pages contain much detail on events and personalities. But there are general lessons for all businesses. Avoid the diversifier’s fallacy. Beware the winner’s curse. Fear adverse selection.
09 September 2015, Financial Times
The financial sector in the 1980s and 1990s was characterised by a rush to incorporation. The mantra of “shareholder value” restored the nexus between finance and business that Smith had feared and Brandeis denounced. And the stage was set for negligence and profusion to prevail once again.
02 September 2015, Financial Times
The bank manager used to be a community figure who would base his (they were all men) lending decisions as much on his local knowledge and the character of the borrower as on figures. He did rather better than his modern-day, intellectually-superior equivalent.
29 July 2015, Financial Times
The Greek crisis is not simply the result of Athens’ inept public administration but also of an extensive carry trade on eurozone convergence by northern European banks, notably in France and Germany, which obtained short-term profits by matching northern eurozone liabilities with southern eurozone assets. For every foolish borrower there is usually a foolish lender.
17 June 2015, Financial Times
Do the almost simultaneous announcements this month of a new regime at Deutsche Bank, and an extensive restructuring at HSBC, symbolise a fundamental change in the structure of financial companies?
18 February 2015, Financial Times
Extremes among observed outcomes are much more often the product of “off-model” events than the result of vanishingly small probabilities. The implication is that most risk models are unsuitable for the principal purpose for which they are devised: protecting financial institutions against severe embarrassment or catastrophic failure.
14 January 2011, Scottish Affairs
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