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| Bankers – TV review | Bankers – TV review |
| (4 months later) | |
| Finance doesn't make great television. That, I think, we can establish as a rule. It's too complicated, too rich with its own harsh jargon: a deep abyss of indices and acronyms barely understood by the bankers spouting them. If we relied on documentaries alone, we wide-eyed telly-fed naifs wouldn't stand much of a chance of ever knowing our leverage from our liquidity. In print, knowledge just about manages to percolate into the brain; in television it mostly whizzes past the ear. | Finance doesn't make great television. That, I think, we can establish as a rule. It's too complicated, too rich with its own harsh jargon: a deep abyss of indices and acronyms barely understood by the bankers spouting them. If we relied on documentaries alone, we wide-eyed telly-fed naifs wouldn't stand much of a chance of ever knowing our leverage from our liquidity. In print, knowledge just about manages to percolate into the brain; in television it mostly whizzes past the ear. |
| We've all grasped a little of the lingo by now, though: a smattering of finance-ese. Enough to visit the City, order a beer, apologise and ask a banker to speak English. Some people can string together four whole sentences on subprime mortgages. A few can give the low-down on derivatives. The very worst of us delight in ruining an evening with our knowledge of collateralised debt obligations. But as the conversation picks up pace it tends to leave us all behind; when our stock of facts runs out, we opt for wild speculation. Or else just quietly nod along. Which, we were reminded in Bankers (BBC2) – the second of a three-part series – was how we ended up here in the first place. | We've all grasped a little of the lingo by now, though: a smattering of finance-ese. Enough to visit the City, order a beer, apologise and ask a banker to speak English. Some people can string together four whole sentences on subprime mortgages. A few can give the low-down on derivatives. The very worst of us delight in ruining an evening with our knowledge of collateralised debt obligations. But as the conversation picks up pace it tends to leave us all behind; when our stock of facts runs out, we opt for wild speculation. Or else just quietly nod along. Which, we were reminded in Bankers (BBC2) – the second of a three-part series – was how we ended up here in the first place. |
| It started out like a shock-doc. In fact, it started out like an episode of 24. Or a hostage video: with a bearded man staring down the lens at us. "I'm New Jersey governor Jon Corzine," he intones, "and I should be dead." Bombastic classical music swells. This is a matter of life and death. Terrorists, you half expect to hear, are plotting to assassinate a presidential candidate. Frantic strings screech over fast cuts of trading floors and chaos. We're gripped, we're excited. Has someone finally made a finance documentary with fight scenes, shagging and a downtown car chase? | It started out like a shock-doc. In fact, it started out like an episode of 24. Or a hostage video: with a bearded man staring down the lens at us. "I'm New Jersey governor Jon Corzine," he intones, "and I should be dead." Bombastic classical music swells. This is a matter of life and death. Terrorists, you half expect to hear, are plotting to assassinate a presidential candidate. Frantic strings screech over fast cuts of trading floors and chaos. We're gripped, we're excited. Has someone finally made a finance documentary with fight scenes, shagging and a downtown car chase? |
| No, of course not. After five delirious minutes of pulse-quickening mayhem, the show settles into the familiar rhythms of the didactic documentary. The bearded man isn't strapped to a chair: he's warning people to wear their seat belts, in a public service advertisement in 2007. Corzine survived a car crash, in which he broke 15 bones and lost "more than half the blood in his body". A crash which, it's suggested, like the bankruptcy he would go on to catalyse on Wall Street, was the product of a classic flaw in the psyche of the banker. He believed he was invulnerable. | No, of course not. After five delirious minutes of pulse-quickening mayhem, the show settles into the familiar rhythms of the didactic documentary. The bearded man isn't strapped to a chair: he's warning people to wear their seat belts, in a public service advertisement in 2007. Corzine survived a car crash, in which he broke 15 bones and lost "more than half the blood in his body". A crash which, it's suggested, like the bankruptcy he would go on to catalyse on Wall Street, was the product of a classic flaw in the psyche of the banker. He believed he was invulnerable. |
| What follows is a forensic examination of two post-crash disasters: the bankruptcy of MF Global, brought on by Corzine's zealous faith in the value of eurobonds from Portugal, Italy and Spain; and the $6bn losses made by JP Morgan in the "London Whale" trades. They were, we learn, products of the mistaken belief that accounting for risk is the same thing as avoiding it. We're told as much by one of the creators of risk analysis, a former managing director of JP Morgan, one of around a dozen interviewees. | What follows is a forensic examination of two post-crash disasters: the bankruptcy of MF Global, brought on by Corzine's zealous faith in the value of eurobonds from Portugal, Italy and Spain; and the $6bn losses made by JP Morgan in the "London Whale" trades. They were, we learn, products of the mistaken belief that accounting for risk is the same thing as avoiding it. We're told as much by one of the creators of risk analysis, a former managing director of JP Morgan, one of around a dozen interviewees. |
| The roster of experts is impressive. We hear from a Nobel prize-winning economist, financial journalists and authors, bigwigs at the Banks of England and America and the FSA, and a fair few bankers who were there as it happened. The recurring refrain is that no one really knew what was going on. "Complexity", says author Bethany McLean, "is a huge problem in the modern financial system. I sometimes think of it as Frankenstein – something built by man that man can no longer control." A problem so complicated even our metaphors for it are confused. | The roster of experts is impressive. We hear from a Nobel prize-winning economist, financial journalists and authors, bigwigs at the Banks of England and America and the FSA, and a fair few bankers who were there as it happened. The recurring refrain is that no one really knew what was going on. "Complexity", says author Bethany McLean, "is a huge problem in the modern financial system. I sometimes think of it as Frankenstein – something built by man that man can no longer control." A problem so complicated even our metaphors for it are confused. |
| No one makes the point better than former MF Global employee Anthony Abruzzo, describing the moment he found Corzine's portfolio: "I said, 'Holy shit, that's – ugh – what is this?' And then I looked up exactly what they were, and they were all eurobonds, and you had the big euro crisis going on, and I was just, you know, I just put my head down and like, what, what do you say?" Don't ask us, mate. That was literally your job. | No one makes the point better than former MF Global employee Anthony Abruzzo, describing the moment he found Corzine's portfolio: "I said, 'Holy shit, that's – ugh – what is this?' And then I looked up exactly what they were, and they were all eurobonds, and you had the big euro crisis going on, and I was just, you know, I just put my head down and like, what, what do you say?" Don't ask us, mate. That was literally your job. |
| The last twist in the tale is that, in Corzine's case, he was right. The European bonds he'd bought for MF Global caused investors to panic and flee. Its share price plummeted, and a company that could trace its history back to 1783 came to an end. But the bonds themselves were sold on by the administrators. They eventually paid off. "It's not always the real risk that does you in," explains McLean. "It's the perception." | The last twist in the tale is that, in Corzine's case, he was right. The European bonds he'd bought for MF Global caused investors to panic and flee. Its share price plummeted, and a company that could trace its history back to 1783 came to an end. But the bonds themselves were sold on by the administrators. They eventually paid off. "It's not always the real risk that does you in," explains McLean. "It's the perception." |
| Perhaps the daunting complexity of finance is the same: we bluff our way through because we see it as impenetrable. What this episode showed, after all the noise and drama, was the value of admitting "I don't know." But now I know a little more, at least. | Perhaps the daunting complexity of finance is the same: we bluff our way through because we see it as impenetrable. What this episode showed, after all the noise and drama, was the value of admitting "I don't know." But now I know a little more, at least. |
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