Tag: Accounting
Balance sheets understate the scale of complexity in the financial system
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.
Why mean outcomes are often meaningless
There is never such a thing as a single true and fair view, only a range of possible outcomes. To assess a value from the mean outcome is as meaningless as the observation that the average person has 1.99 legs.
GDP is flawed – just not the way most people think
It is a poor criticism of a thermometer that it does not tell us how comfortable we feel.
Is it better to play it safe or to place bets...
Although transactions with low probability of large loss and high probability of small gain carry the potential for disaster, they can appear attractive for a very long time – perhaps for ever.
The Olympic optimism bias has left the taxpayer out of pocket
The Olympiad was a good party, which cost the British population about £200 per head.
The market is not the best place to set a fair...
What happened at Enron, and in the banks, was that trading assets were marked to values that had been established not by people who knew about the contracts or the loans, but by the biased and ill-informed assessments of the traders.
Don’t blame the havens – tax dodging is everyone else’s fault
Corporation tax is a tax on corporate activity and on shareholders, and it is not well designed to achieve either purpose.
Directors have a duty beyond just enriching shareholders
British law might have said that the duty of directors is simply to promote the interests of the company’s members. But it doesn’t – and that is no accident.
Politicians bow to pressures to bend data
For a time, the coalition government seemed willing to let figures tell their own story rather than one written by their political advisers; but that time seems to have passed.
Corporate tax should be fair and shared
Ireland accounts for a share of global profit disproportionate to the size of the Irish economy. Not because business in Ireland is particularly successful but because reporting profits in Ireland is particularly attractive.
