Banking Risk Quotes

I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

Regulation is necessary, particularly in a sector, like the banking sector, which exposes countries and people to a risk.

Bailing out every bank that fails makes the system riskier, not safer.

Prior to the 2008 recession, many financial institutions were engaging in 'proprietary lending,' where a bank would invest funds for its own gain instead of earning revenue through commission by trading on behalf of clients.

Goldman Sachs now has the biggest oil position in America and probably one of the biggest oil positions in the world. They're long oil. So the banks have aggressively been buying oil on their balance sheets. I think they might see this as a way to bail themselves out of this mortgage crisis.

Economics is not a science; it is a quasi-religion: part superstition, part mystique, part sentimentality. Bankers dream like other men, the only difference being that when their dreams turn to nightmares, we all lose sleep. There can be no trusting the muttering of any prelate when it comes to money.

Bringing back something akin to Glass-Steagall would clearly help limit risk in the system. And that's a very good and worthy goal. Letting banks sell securities and insurance products and services allowed them to grow too big too fast and fueled a culture that put profit and pay over prudence.

At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.

A bank needs models to measure risk. The problem, however, is that any one bank can measure its risk, but it also has to know what the risk taken by other banks in the system happens to be at any particular moment.

Banking is a very treacherous business because you don't realize it is risky until it is too late. It is like calm waters that deliver huge storms.

Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement.

The Chinese banking system is built on quicksand and that's the one thing a lot of people don't realize. Everybody seems to think it is a free and clear open checkbook. It's not. The banking system in China is extremely fragile.

The fundamental problem with banks is what it's always been: they're in the business of banking, and banking, whether plain vanilla or incredibly sophisticated, is inherently risky.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

There is a banking adage that if it's growing like a weed, it's a good chance that it's a weed.

The banking business is no favorite of ours. When assets are twenty times equity - a common ratio in this industry - mistakes that involve only a small portion of assets can destroy a major portion of equity. And mistakes have been the rule rather than the exception at many major banks.

Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from these rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal to the banking company which attempts it.

Complexity and interconnectedness matter as much as size in assessing risk in banking.

I think the most important thing to understand about credit derivatives and their use at JPMorgan is they served a number of different purposes. First and foremost, they were a tool which initially was seen as being useful in managing the bank's own risk management challenges.

If you are in banking and lending, surprise outcomes are likely to be negative for you.

Our supermarkets sell us horsemeat as beef, our politicians fiddle their expenses, and our bankers risk money that isn't theirs. So it's not surprising the public don't trust anyone or anything.

Rather than worrying about entities, we should worry about the trends in technology that may cause disruptions... if we get so paranoid that banking is no longer going to exist and banks are going to get disrupted, I think that is a different worry.

Fractional reserve banks are sitting ducks and are always subject to contraction. When the banks' state of inherent bankruptcy is discovered, for example, people will tend to cash in their deposits, and the contractionary, deflationary pressure could be severe.

When a bank calls in a loan, it obviously hurts the customer in question. But it also adversely affects other banks that have lent to this borrower. They are now less likely to be repaid and so can't as readily lend to their own customers.

Bankers, they're not harmed by their mistakes. They benefit when things go right, and the society pays the price.