Trust Digest 34 (January 6, 2014)

The Swedish Bank Boss Who Likes to do Things Differently
Anders Bouvin is the boss of the most successful bank you've probably never heard of. And he, like the bank he runs, will challenge your preconceptions.
Key Words: Handelsbanken, Andre Bouvin, Bank Executives
Trust Issues: Responsibility, Competence, Reputation

Bankers’ Pay: The Law of Small(er) Numbers
After peaking at the end of 2010, employment in the investment-banking industry has been declining steadily. Deutsche Bank reckons that the number of bankers employed by the ten largest firms will fall by about 3,000 in 2014, leaving the total 20% below its peak. Pay is dropping too.
Key Words: Salaries, Bankers’ pay
Trust Issues: Accountability, Regulation

In No One We Trust

In America today, we are sometimes made to feel that it is naïve to be preoccupied with trust. Our songs advise against it, our TV shows tell stories showing its futility, and incessant reports of financial scandal remind us we’d be fools to give it to our bankers. That last point may be true, but that doesn’t mean we should stop striving for a bit more trust in our society and our economy. Trust is what makes contracts, plans and everyday transactions possible; it facilitates the democratic process, from voting to law creation, and is necessary for social stability. It is essential for our lives. It is trust, more than money, that makes the world go round.
Key Words: Stiglitz, Trust
Trust Issues: Responsibility, Accountability, Integrity

The Least Narcissistic American CEOs
The dean of a business school in Sydney, Australia has named the 10 least narcissistic CEOs in the United States. Three of the 10 are women.
Key Words: CEOs, Narcissism
Trust Issues: Responsibility, Ethics, Benevolent Concern

Credit Score, by Multiple Choice

Banks in 16 countries are using a psychometric test to predict future behavior undefined specifically, whether someone will pay back a loan. Originally a Harvard doctoral project, the Entrepreneurial Finance Lab’s test has increasingly won the confidence of risk-averse bankers in places where, many economists believe, credit bottlenecks are severely stunting growth.
Key Words: Developing countries, Credit scores, Loans
Trust Issues: Responsibility, Reputation

Regulator of Wall Street Loses Its Hard-Charging Chairman
President Obama has appointed Timothy G. Massad, a Treasury Department official with a blank slate for a regulatory agenda, as Mr. Gensler’s successor. While Mr. Gensler had his finger on every button, Mr. Massad could take a more conciliatory stance.
Key Words: Commodity Futures Trading Commission
Trust Issues: Regulation

Ronald Rubin: How the 'Wolf of Wall Street' Really Did It
The swindler known as the "Wolf of Wall Street" taught me how to pull off his boiler-room fraud, down to the smallest details. Movie director Martin Scorsese's lurid version of the tale now showing in multiplexes doesn't capture how the scams really worked.
Key Words: “Wolf of Wall Street”, Movie, Fraud
Trust Issues: Corruption, Ethics

Red Alert over Record Year for Insider Dealing
Fund groups are on red alert over the global regulatory clampdown on insider trading as new figures reveal the level of fines, arrests and investigations around the world jumped significantly in 2013.
Key Words: Accountability, Integrity, Ethics
Trust Issues: Regulation, Ethics

British Reporting Rule Change Exposes Transatlantic Cultural Gap
As investors prepare to digest the latest round of company earnings figures, Britain's move to scrap the quarterly reporting requirement has revealed a divergence of opinion between the domestic and U.S. investment communities. While British investors endorse what they perceive as a measure against short-termism, their counterparts across the Atlantic are concerned that less frequent company reports will mean less transparency.
Key Words: Quarterly reporting, Regulation, Transparency
Trust Issues: Transparency, Regulation

Restoring Trust in Barclays 'To Take Five to 10 Years'
Barclays boss Antony Jenkins says it will take five to 10 years to restore trust in banks, while Archbishop Welby says it will take a generation
Key Words: Trust, Barclays
Trust Issues: Reputation, Accountability

Politics and Corporate Social Responsibility
In our paper, Are Red or Blue Companies More Likely to Go Green? Politics and Corporate Social Responsibility, forthcoming in the Journal of Financial Economics, we test the hypothesis that Democratic-leaning firms (i.e., firms with a higher proportion of Democratic stakeholders) are associated with more socially responsible policies than Republican-leaning firms. Our results can be illustrated by a comparison of Starbucks and Wendy’s, two large and well-known food and drink retailers.
Key Words: CSR
Trust Issues: Responsibility, Benevolent Concern, Stewardship

Sustainability’s Next Frontier
In this 2013 report, new research by MIT Sloan Management Review and The Boston Consulting Group looks at companies that “walk the talk” in addressing significant sustainability concerns. So-called “Walkers” focus heavily on five fronts: sustainability strategy, business case, measurement, business model innovation and leadership commitment. For them, addressing significant sustainability issues has become a core strategic imperative and a way to mitigate threats and identify new opportunities.
Key Words: Sustainability
Trust Issues: Responsibility, Stewardship

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