Canadian Chartered Banks

[train]

Ever considered that banks are the best cookers of the books?

I bet THEY don't even know how much they really make with all their accounting hanky panky and rule interpretation. Their first priority (after fetherin thier own ness) is to minimize tax. I bet they don't even knw how much they really make, the calculators don't have that manynumbers!

Bet you are wrong.

 

[booboobear]

. If the CEO makes a mistake, the company very well could be farked for good. If a guy in the mailroom makes a mistake, the outbound mail is a day late. (Which could have dire consequences in some cases, but you get the point.)

There are a lot of exceptions to this rule . If a mechanic for an airline or the pilot makes a mistake it could cost hundreds of lives . In terms of day to day responsibility no CEO has that much responsibility.

 

[RTRD]

Not true...

If a mechanic for an airline or the pilot makes a mistake it could cost hundreds of lives . In terms of day to day responsibility no CEO has that much responsibility.

While the consequences would probably not be as IMMEDIATE as in the case of airline pilots....there are LOTS of CEO (Pharmacutical Industry comes to mind...) who make decisions that will literally affect thousands of lives.

 

[booboobear]

While the consequences would probably not be as IMMEDIATE as in the case of airline pilots....there are LOTS of CEO (Pharmacutical Industry comes to mind...) who make decisions that will literally affect thousands of lives.

The difference is that using your Pharmacutical ceo as an example he has numerous people advising him and time to research his decision. A pilot in a crisis hasn't got the luxury of time and it his his hands alone that must fly the plane.
In reality front line people are more responsible for a companies success than they get credit for.
If everyone at Wendys was rude to you and anyone else that went there they would go out of business tomorrow regardless of how good their CEO was,

 

[onthebottom]

What possible relevence is this statement to the discussion about whether Banks are profit orientated at the expense of employee welfare?

No relevance, just a fun fact for an industry the rewards being big and used to be big.....

Lol Actually the Royal Bank of Canada has a decent size operation in Hillbilly-north/tarheels land . Like any good Canadian business the US market is regarded as an expansion opportunity.

I'm just suggesting that it works both ways, and that if you let your banks merge they would be better prepared to complete globally.

CIT mastered the pre-payment penalties and fees trap so this is not a Canadian concept.

I don't know about that but it's a very old concept.

The concept of long-term fund matching and rate volitility are what cause the penalties. Closed mortgage lending is , in simplistic terms matching long-term deposits such as GIC's with long term loans and making money on the spread. The trick, from the bank's perspective, is to make sure both sides are balanced. So it's hardly "silly" from their perspectice.

It is a silly practice because the banks swap out this risk. They already "know" thru prepayment models that you will prepay, they price the loan that way, then they screw you on the back end as well because they have pricing power. Believe me, I understand the matched funding theories (all too well as I've spent many years with Treasures and ALM teams in North American and Asia Pacific review best practices for FTP (funds transfer pricing) and prepayment modeling).

OTB

 

[onthebottom]

Ever considered that banks are the best cookers of the books?

Cookers might be a strong term, but they do "smooth" earnings with loan loss reserves - I think the SunTrust CFO in Atlanta just took it in the shorts for this. In a SOX world this is a no-no.

I bet THEY don't even know how much they really make with all their accounting hanky panky and rule interpretation. Their first priority (after fetherin thier own ness) is to minimize tax. I bet they don't even knw how much they really make, the calculators don't have that manynumbers!

They do know how much they make, but it is the rare bank that knows why, and can accurately predict (thus the earnings smoothing mentioned above). It's a bear of an industry to measure and, how do I say this nicely, not filled with the sharpest knives in the drawer if you know what I mean. There are smart people with no vision, IT geeks who just want to build stuff and lending officers, I've meet VERY few bankers who know what they are doing and why....

OTB

 

[nervous]

What is RESSOP?

Royal Employee Shares Savings Oportunity Plan.