Here’s another crazy real life scene from “Banking in times of the Basel Committee”
Bank President Wally: "Colleagues, in order to obtain a higher risk adjusted return on our equity, it is more important to ascertain that the loans is perceived as safe, so that they require us to hold less equity against it, than to negotiate a higher interest rate with the borrower.
And so lets go out there and fight to find us those real low equity requirements that helps us maximizes our return to our shareholders (and our bonuses) because, if we don’t, you can be damn sure our competitors will."
Jr. Credit Officer Martin: "Hear, hear!"
Jr. Credit Officer Martin: "Hear, hear!"
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