Finance – the ethical financier

CNBC: Saving the World and Wall Street – a discussion with MacAskill and Allen

Oxford graduate student, William MacAskill, wrote a piece in Quartz: To save the world, don’t get a job at a charity; go work on Wall Street. He makes the point that you might be more effective making a ton on money on Wall Street and giving a large chunk of it away rather than becoming just one more person working for a non-profit because charities are labor rich but money poor.I responded with Don’t come to Wall Street for the money, even if you plan on giving it away, in which I say it is more easily said than done because it is possible to do more harm than all the good you can do if you give it all away.

CNBC called and soon William and I were on the show for one of those 60 second spots with a 30 second commercial in the middle. You can watch it here, although to get a better sense of what we’re trying to say it is better to read the original articles.

To save the world come to Wall Street and save the world from Wall Street

CrookList — Do you want to be like these people? (Don’t answer that; we’re afraid of your answer.)

(originally published in Quartz on February 28, 2013)

I am a 60-year-old child of the 60’s who never gave up on the idea that I can save the world—even after three decades on Wall Street.

That is why I enjoyed the piece by William MacAskill, To save the world, don’t get a job at a charity; go work on Wall Street.

The problem is that this is more easily said than done. Most people working on Wall Street can make ends meet while a small few can make vastly more money than they need. The trick is to make sure that the process of making money does no harm.

Question: How much money would all the participants in the mortgage securitization industry have to give to charity to undo the harm they have caused?

Answer: More than they have ever made.

The real opportunity to do good on Wall Street is to reform it from within. But to do the right thing you have to be able to recognize the difference between right and wrong, and then you must be able to say “no” when ordered to do the wrong thing.

Here is my advice if you want to come to Wall Street and do good: Continue reading To save the world come to Wall Street and save the world from Wall Street

How to raise a child to be an ethical financier (or anything else for that matter)

I think the majority of problems in finance stem not from poorly designed regulations or lax enforcement but rather from bad parenting. I have never been saved from doing the wrong thing because of a regulator or a regulation or a manager or a compliance officer or a lawyer. I have been saved by the imagined voice of my father saying, “I’m ashamed of you.” (And once he was gone, now I imagine my children saying the same thing.)

What my father said to me, which is the same as what I say to my children

In 1970 before sending me to college, my father said to me: Continue reading How to raise a child to be an ethical financier (or anything else for that matter)

People who deal with large sums of money should be called “financiers” whether they like it or not.

Reputation managers, public relations agents, and spinmeisters working their magic on a clueless press and a forgetful populace have re-defined words so frequently that they have lost their meaning.

“Financial engineers” used to be the “rocket scientists on Wall Street” who concocted esoteric “derivatives” but when these products went south they became “innovators” working on “alternative investments” – which were presumably alternatives to the stuff they came up with previously. Eventually the International Association of Financial Engineers changed its name to the International Association of Quantitative Finance with the goal of “advancing the field of quantitative finance.” Presumably, their members who once called themselves “financial engineers” are now “quantitative financiers.” After their next blow-up I wonder what term they will advance the art by calling themselves something else.

“Banker” used to mean someone who took deposits and made loans. There were variants: Retail Bankers, Commercial Bankers, Investment Bankers, Mortgage Bankers, and even Personal Bankers. But there are also speculators and hedge funds operating as banks, and some “bankers” are best described as “bank robbers.”

My favorite is “hedge fund manager.” The reason is that I used to be one, and I got a kick out of how many definitions people could come up with. The only one I’ve found that made any sense was, “A payout schedule in search of a strategy.”

I think everyone who deals with large sums of money be called “financiers” first and foremost. The reason is that it has the broadest possible definition. Continue reading People who deal with large sums of money should be called “financiers” whether they like it or not.