Do bank shareholders bear any responsibility for the mess the financial world is in? This question was posed by a member of the audience at a recent conference held by the Financial Services Authority. It didn’t get answered by the FSA.
But asset managers have provided an answer of sorts, with Hendrik du Toit of Investec Asset Management and Joan Payden of Payden & Rygel both admitting their industry failed to ask tough questions.
You could argue that, if bank board directors did not know or understand the extent of the risks banks were taking on and handing out, what hope did shareholders have? But shareholders may well have had a better insight than board members with non-financial backgrounds.
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