The fact is regulators slept on the job, investment bankers pounced at short term gains, and mortgage bankers jumped at commissions, while the worst of liberals encouraging low income home ownership and conservatives deregulating banking allowed Fannie mae and Freddie Mac to underwrite the clusterfuck. We ask four bankers for their verdict on this damning indictment of their world Explain the diffterence from today and years ago with home loans. 10. Takes a closer look at what brought about the 2008 financial meltdown. Summers exemplifies the links between cheerleaders in academia, Wall Street, supine regulators and an ignorant Capitol Hill that Ferguson stresses were at the root of the problem. Inside Job dis-cusses evidence that senior bankers on Wall Street used prostitutes and illegal drugs, sometimes paying with company credit cards. The two bankers, with the help of Gudmundsson in Luxembourg and stockholder Olafsson, had directed Kaupthing to lend the sheik $280 million to … Then, notwithstanding a total banking system collapse, the bankers will be motivated to do the deals again. So I think the government has to tread a fine line between bringing in regulation bit by bit, and regulating all at once. (One young banker bragged to me about working the “banker 9-to-5,” defined as … Massive re-regulation is required to ensure that finance is safely locked up in a straitjacket again. Is the plane even off the ground? At first the financial industry was highly regulated. The OTC derivative market is the largest market for derivatives, and is largely unregulated with respect to disclosure of information between the parties, since the OTC market is made up of banks and other highly sophisticated parties, such as hedge funds. The bankers know ignorance is their trump card. ", Ian Hart was a Wall St derivatives trader, before becoming a head-hunter for, among other banks, Lehman Brothers. It is a very good, if somewhat dry, analysis of the issues which led to the global financial crisis of 2008 and the billionaire, mostly egotistical power brokers who ran the major American investment banks. Consumers enjoyed buying houses that ultimately they couldn't afford, but mortgages were shoved down their throats without any care on the part of the bankers. I have an issue with some of the elements pursued in the rest of the film. With the old system of home loans, it took a long time and the money went to lenders. * The title of the movie of course, refers to the fact that the same people who saw unprecedented profits during these times, are also the same people in power making the policy decisions, and continue to today. Staff at banks such as RBS should be retained by longer-term incentive schemes such as the one being introduced at Barclays. "The film was right that banking became synonymous with living the high life, with drug-taking, and basically being above the law. When this happened, they started hoarding cash to pay for their day-to-day operations. … ISAKALFIE Assignment: INSIDE JOB VIDEO QUESTIONS, Communist Manifesto ch 1_Capitalism Factory.pdf, Copy_of_Inside_Job_Documentary_Viewing_Guide, Coates reading notesThe first epigraph comes from Richard Wrigh.pdf, The Botany of Desire - Michael Pollan_208.pdf. The film leaves us with a bitter pill to swallow. 9. "The film's first half-hour was absolutely dead-on. Executive Summary Inside Job is a documentary by Charles Ferguson, about the causes of the global financial crisis of 2008.The basic premise of Inside Job is that the global financial crisis of 2008 was the effect of a series of causes beginning in the 1970s. It wasn't all innocent bamboozled bankers. Whether they took large slugs of cash for writing poorly researched, cheerleading reports on the economic miracle in Iceland (pre-crash), as former US central banker Frederic Mishkin is found doing, is less clear. If you talk to a sole trader, they'll tell you that when times are good, put some money away for when times are bad. Inside Job clenched the Academy Award for best ... That led to the banning of the regulation of derivatives. The City itself employs vast numbers of people – not just as bankers, but also on the periphery – and until we move away from that, and find other ways of employing these people, you can't just shut down an industry. Accompanied by narration from Matt Damon, Ferguson begins and ends in Iceland, a flourishing country that gave American-style banking a try--and paid the price. After 2001 the financial institutions were more powerful, profitable and concentrated. But the consumers just spent and spent, and assumed the good times would go on for ever. Over here, the relationship between academia and business appears to be more arm's length, though London Business School dean Sir Andrew Likierman sits on the Barclays board, while Howard Davies, who argued for light-touch regulation while head of the Financial Services Authority, has become director of the London School of Economics. I would love that to change, but right now, a lot of the GDP comes from people in and around finance. The UK's chief villian, however, is probably the disgraced, but largely unpunished, banker Sir Fred Goodwin, the former boss of Royal Bank of Scotland, once the fifth-largest bank in the world. The film seems to blame ALL the recent financial problems on greedy investment bankers and some government … Here, the FT’s markets team picks out the notable protagonists, and the key person to watch in 2021. Typically, banks have addressed climate change from a corporate social responsibility perspective rather than a risk management agenda. Bankers wanted to keep derivatives unregulated because they could use them to bet on anything (ex: oil prices, the weather, bankruptcy of a company)8. Who is Barney Frank and was his role/title in the movie? Discuss the collapse of Lehman Brothers and AIG as brought out in the video. In 2000, the law was passed and derivatives were led unregulated, as a result, the unregulated derivatives market boomed after 2001. Has the plane in fact crashed, not just landed? What are the riskiest loans called? Chuck Prince, the CEO of Citigroup at the time of the crisis, may have been overpaid – but I don't think he was particularly at fault. This was an excellent system that did not kill America’s economy, but made it safer. It talked about regulators and ratings agencies. What did bankers do with derivatives? With very harsh regulation, that's unfortunately what you risk. What makes it even more frustrating is that many of the key figures behind the crisis are currently on Barak Obama's staff. In an eventful year for global markets, some individuals (and one company) stand out. Despite minor errors and occasional oversimplification, overall Inside Job does an extremely effective job in covering a lot of ground in a compelling manner. How does one go into battle yelling slogans about credit default swaps? What did bankers do with derivatives? The first part (How we got here): the movie explains how the economy used to be after the great depression. 8. Who is Barney Frank and was his role/title in the movie? 42. share. 9. One was the vilification of individual people. … What did bankers do with derivatives? Barney Frank was the Chairman of the Financial Services Committee of the U.S. House of Representatives. As he did with the occupation of Iraq in No End in Sight, Charles Ferguson shines a light on the global financial crisis in Inside Job. Give examples. We might have asked questions such as: Is the pilot drunk? But can banks do more to fully account for climate risk? In five parts, the film explores how changes in the policy … Imagine you own a dairy, and besides selling milk, you also buy and sell cows. Photograph: Cameron Davidson. What did bankers do with derivatives Bankers wanted to keep derivatives, 7 out of 7 people found this document helpful. Still, no matter how much it is explained, the general public is not going to understand. Inside Job is a 2010 American documentary film, directed by Charles Ferguson, about the late-2000s financial crisis. Learn vocabulary, terms, and more with flashcards, games, ... What did the Securities and Exchange Commission do concerning this 2001 crash and what led up to it? We see the French minister of finance [Christine Lagarde], there's a woman from the Securities and Exchange Commission – but they're few and far between. 10.Explain the title of Elliot Spitzer and his role in the film: 11.What are the riskiest loans called? Banks were offered the opportunity to offload a bad loan, bundled with good loans, in a secondary market through collateralized loans, thus passing on the risk of default to the buyer. Larry Summers made $20 million as a consultant to a hedge fund that relied heavily on derivatives. Then he looks at the spectacular rise … There's a gentleman's club, and they all look after each other.". Derivatives can and do serve a socially useful purpose to businesses, financial firms, institutions and governments, namely the management of various financial risks including currency, interest rate, commodity, equity, and credit, plus numerous second order risks and less conventional risks. Maybe Inside Job will make us more savvy in time for the next crash. For example, a bank’s financial profile might make it vulnerable to losses from changes in interest rates. Banks use derivatives to hedge, to reduce the risks involved in the bank’s operations. What are the risklest loans called? The bank could purchase interest rate futures to protect itself. It helps that Summers looks like a mafia boss, but the difficulties in making the case against him are shown by the need to explain financial products like credit default swaps and how securitisation was used by banks to increase their borrowing. 9. 9.Explain the difference from today and years ago with home loans. What is the problem with this? It's hard to argue with some of the facts shown in the movie, but of course if you are already in the richest … This is a problem because if the CDO’s cannot be paid back they create a, bubble which meant that everyone could get a mortgage loan even if they could not afford it. His villainous lineup includes bankers, politicians (many of whom were previously bankers), regulators, the credit ratings agencies and academics. 8. Who is Barney Frank and was his role/title in the movie? Yet the implicit promise of Inside Job’s title to uncover hidden secrets and name the guilty parties dwindles down in the end to: "Most of the benefits of the tax cuts went to the wealthiest one per cent of taxpayers." You command respect. Give it your best shot.". Inside Job is a 2010 American documentary film, directed by Charles Ferguson, about the late-2000s financial crisis.Ferguson, who began researching in 2008, says the film is about "the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption". Banks and hedge funds had lots of derivatives that were both declining in value and that they couldn't sell. Start studying Inside Job: Part 1. After the deregulation, many financial companies were caught in frauds, like money laundering, bribe, cooking books, showing wrong financial performance etc. The film suggested it was the bankers and the politicians who were driving the collapse – and fair enough, there was some mis-selling of mortgages. Inside Job clearly catches some of the anti-banker mood, and the public is quite right to be outraged at how banks refinanced at the taxpayers' expense are paying outsized bonuses. The Dangers of Derivatives, opinion in The Wall Street Journal, May 20, 1999, by Martin Mayer, Guest Scholar, The Brookings Institution Explain the title of Elliot Spitzer and his role in the film:. As he did with the occupation of Iraq in No End in Sight, Charles Ferguson shines a light on the global financial crisis in Inside Job. Clearly they're not. When Michael Moore made his debut feature, Roger and Me, he set about vilifying the boss of General Motors, the now deceased Roger B Smith, for destroying his home town of Flint, Michigan. 8.Who is Barney Frank and was his role/title in the movie? Summaries. Who paid for the plane, and is it the same entity that paid for the pilot’s license? 11. Explain the difference from today and years ago with home loans. I'm one of the few women in banking and it's really obvious watching Inside Job that this is the case. Another angle missed by the film was the role of accounting firms. Explain the title of Ellot Spitzer and his role in the film:. Derivatives is a huge and diverse area of financial services – when all of the subsectors of derivatives are added together, the market is estimated to be worth more than one quadrillion dollars. Barney Frank was the Chairman of the Financial Services Committee of the U.S. House of, Representatives. It laid the blame squarely where it belongs – at the feet of bankers, of ratings agencies, of regulators – and it interviewed a lot of heavyweight people, such as Dominique Strauss-Kahn, Eliot Spitzer, Raghuram Rajan and Glenn Hubbard. Buyers and sellers have a lot of faith in you because of your scale and reputation. Yes, deregulation did go too far – particularly with the repeal of the Glass-Steagall Act of 1933, which might have prevented banks gambling with depositors' money. But “the bankers did it” narrative is incomplete, … Do tell! Inside Job an ambitious picture, clearly aiming to stir public anger and action by showing how criminally corrupt the financial services has become and how it has subverted government and the economics discipline. However, the government failed to keep these acts, and during the Clinton Administration the Glass-Steagal act was repealed by … Go watch Inside Job. This jaw dropping documentary in its reckless interviews and prying identified greed and deregulation by Federal government as … 12. The bankers and the euro. The Derivative instruments are basically speculation or betting on stock prices, bankruptcy of companies, interest rates etc. If they had more women in banking, I really think there would be more sense of community, and perhaps things such as this crisis wouldn't happen quite so often, because you wouldn't have this sense of being part of a boys' club.". questioning some involved in the financial crisis. As a lot of these banks are global and flexible, they can just go overseas. Derivatives only require a small down payment, called “paying on margin.” Many derivatives contracts are offset, or liquidated, by another derivative before coming to term. Of course, the wealthiest one per cent of taxpayers pay the most tax, so they will always get most of the benefits of any cut in rates. In Inside Job, the name that keeps cropping up is Larry Summers, a friend of President Bill Clinton and more recently Barack Obama. The film Inside Job brilliantly exposes the corruption in US banking that led to the 2008 crash. 7. Bankers wanted to keep derivatives unregulated because they could use them to bet on anything (ex: oil prices, the weather, bankruptcy of a company). It's not a black-and-white issue, and you can't be that kneejerk: the UK is a service-based economy. These causes most prominently include – (i) deregulation that allowed excessive and reckless actions in finance fraud (i) … But it wasn't just mortgages: it was bank debt, credit-card debt, car loans. 12. Now that being critical and … : Planet Money I will tell you what a derivative is, but I will take a while to get there, and you may feel cheated. Where I work, we are compliant up to our eyeballs – be it drug checks, expenses checks, or simply the monitoring of all phonecalls and emails. The conspiracy that Inside Job unveils is not of the obviously false Masonic or 9/11 Truth varieties—there’s no smoke-filled room of string-pulling supergeniuses at … During the interview, Hubbard, who denies he was corrupted by his paid-for relationships with government, angrily barks: "You've got five minutes, mister. Duh! Why did investment bankers prefer them? We were told this line before, but we were momentarily alert then and we considered it critically. Sure, there's greater scrutiny of bonuses – but many bankers think they were not responsible personally for the crisis and they're worth every penny they're paid. Banks were prohibited from speculating in depositors’ savings and investment banks were small and … The median annual pay of a banker was $74,000 overall as of November, 2015, according to the job site Indeed. Explain the difference from today and years ago with home loans. To meet this demand, banks and mortgage brokers offered home loans to just about anyone. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, … And I'll talk in more detail about what I actually did in the industry. One of the most fascinating aspects of “Inside Job” involves the chatty on-camera insights of Kristin Davis, a Wall Street madam, who says the Street operated in a climate of abundant sex and cocaine for valued clients and the traders themselves. How did the government respond? Accompanied by narration from Matt Damon, Ferguson begins and ends in Iceland, a flourishing country that gave American-style banking a try - … 6.Does the video say derivatives make markets safer or more unstable? There is a huge amount of blame to be attributed to them. Ferguson, who began researching in 2008, says the film is about “the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption”. Although it features some of the most coveted and financially rewarding positions in the banking industry, investment banking is also one of the most challenging and difficult career paths, Guide to IB Ask A Banker: What's A Derivative? 9. 1 But this can vary widely depending on the type of banker you are. As the demand for these derivatives grew, so did the banks' demand for more and more mortgages to back the securities. Investment banks gather together mortgages, loans 'Inside Job' provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Derivatives. She says it was an accepted part of the corporate culture that hookers at $1,000 an hour and up were kept on … It will doubtless make many people – especially those who lost their jobs and savings – angry at not only what the banks did, but that many of the people responsible are still in their jobs, and that no one's gone to prison. Charles Ferguson’s award winning documentary film ‘Inside Job’ told about by Matt Damon surveyed the deregulation of the financial industry and explored how the lack of great ethical banking practices helped in creating the financial crisis. This preview shows page 1 - 2 out of 2 pages. And the accusation that the worlds of academia and politics were complicit in the crisis was completely valid. Charles Ferguson's film Inside Job attempts to blame a wider cast list for the banking crash of 2008 and explains why so little has been done to reform the financial world or bring criminal prosecutions against the main protagonists. What did bankers do with derivatives? It beggars belief that ordinary taxpayers are facing higher taxes and spending cuts, while bankers walked away scot-free. Wall Street is notorious for the long hours it imposes on its worker bees. 11. Use the examples from the video Explain what the Fed did to address the issues of predatory lending, CDOs, CDSs, and subprime loans. They were afraid of receiving more defaulting derivatives s collateral. Inside Job (Dir: Charles Ferguson, 2010, 108 min.)   That is what prompted the bank bailout bill. Reporting of OTC amounts is difficult because trades can occur in private, without activity being visible on any exchange. The cancer of bankers. What is the problem with this? It was their responsibility to monitor the accounts of banks, and when they signed off a bank's results, they were stating their confidence in the bank's ability to trade solvently.   Banks offered subprime mortgages because they made so much money from the derivatives, rather than the loans themselves. The film shows that people who had bought a house they couldn't afford are now living in a tent, whereas bankers have still got their jobs.

Hand Puns For School, Graco Snugride Infant Insert When To Remove, Mus 173 Ucsd Reddit, Grenade Launcher Gta 5, Why Is My Leopard Gecko Glass Surfing, Dr Robin Zasio Biography, Are Anklets Cultural Appropriation, Cobalt Iii Sulfite Formula, Kit Kat Tv Commercials, The Odyssey Book 12 Summary, Liuna Staff And Affiliates Pension Fund,