Short Stories

---

I do not fully understand what exactly caused the downfall of Barings Bank and the involvement of a certain Sir named Leeson, but I do know of a popular commercial bank in my home country that also filed for bankruptcy at some point. Many of its clients had prospered enviably over the years and so much so was the reliability of this bank believed, due to what seemed to each of its clients a lifetime of profitable transacting, that many eventually began to opt-out of monitoring statements of account and quarterly meeting publications for shareholders. Only the more paranoid investors therefore saw the warning signs first and quietly withdrew their savings before a widely publicized crash (The demand for pointers on how to do this more generically with respect to other institutions will be discussed in my next article).

The crash event took place on a day when none were expecting it. All was well in the morning but by evening there was a general “weeping and gnashing of teeth”. Some of the more heavily exposed were actually unable to fully process events till a few days later. One of the more paranoid investors, that had turned to an old and prestigious bank in Switzerland in desperation, despite the crippling exchange rate, had apparently been overheard commenting on how an invisible bank, in some cases, can be better than one that can be touched and felt.

I cannot claim to fully understand the complexities of the banking world at this present time but one thing that has become apparent is the need for a better and more comprehensive understanding of fundamentals. When all financial engineering is stripped away, in some rare cases, some have been known to find that they are actually more an ill-positioned client in a gigantic pyramid scheme than a candidate of untold riches and glory...

I wish you a very profitable banking season and most importantly, in the words of our good Lord Himself, pray that you “...store up riches for yourselves in heaven, where moths and rust cannot destroy and robbers cannot break in and steal...” Shalom.

---

PLEASE ENCOURAGE AUTHOR BELOW LEAVE COMMENT ON ARTICLE AS A MEMBER OR VISITOR