And now for a really stupid investigation into a bank
THE Americans really do suffer from the not invented here syndrome. They’ve this really serious belief that the whole world is like the US: and if it isn’t that it should be made like it. One example is this, something I’d describe as one of the most stupid investigations into a bank that I’ve ever seen:
The U.S. Securities and Exchange Commission’s anti-bribery unit is investigating whether JPMorgan Chase & Co. (JPM) hired the children of Chinese officials to help its business, The New York Times reported, citing a confidential government document.
The bank hired the son of a former Chinese banking regulator who is currently chairman of China Everbright Group Ltd., a state-controlled financial company, while its Hong Kong office employed a Chinese railway official’s daughter, according to the report. After each appointment, the bank secured assignments from companies connected to the new hires’ parents, according to the report.
The bank has not been accused of any wrongdoing, according to the report.
There’s two levels of stupidity here. The first is that the way China works is through “guangxi” or connections. Nothing right or wrong about it, it just is. It’s the result of the place being run by the Communist Party for the last 70 years: if you can get in to see the local party chief then you can get things done, if you cannot you can’t.
The second is that the way investment banking works is through connections. So you naturally hire people who have them. Add those two together and in China whether or not you get hired by an investment bank will depend upon who you have connections to. And that’s really it.
Putting this in English terms it’s like investigating a firm in the City for hiring Old Etonians. WTF?