Your a professional, take some responsibility...
Posted by Morgan on 10th Oct 2008
If you are a local government treasurer and you got caught with a load of cash in Landesbanki, Kaupthing or any other Icelandic Bank then you deserve no sympathy. In fact you should be flogged by your local tax payers.
You were trusted with tax payers money because you are a professional fund manager. You were not the honorary treasurer collecting the Xmas kitty for the local mothers union. As a professional you should have known your job. Anyone who knows anything about economics or ooccasionallyy glances at the FT should have understood that Iceland was the ultimate hot money trade that carried a lot of risk. There have been rumours about the solvencyy of the Icelandic Banks for months and CDS spreads illustrated that this risk was increasing on a continuous basis.
Admittedly they offered a better interest rate that the British Banks but there was a good reason for that. It's called a risk premium. Its the first principle you learn in A level economics. If you were managing money on behalf of a risk averse local authority you should not have been able to spell Iceland let alone Kaupthing. To have been investing money with them to earn a meagre 0.25% or 0.5% more each year was simply crazy.
When the government bails out the local authorities I hope they make an example out of their treasurers as they have done with the reckless bankers.