Why did I cause the financial crisis? Because I could…
Just before the world imploded, before Dick Fuld lived up to his first name and before we all learned that Iceland really is a strange and unusual place, HSBC telephoned me.
“Would you like to change your mortgage rate from whatever it is to a special offer, just for you Sir, a mere .23% (that’s right – point two three per cent) over base?
Not being a village idiot, I always question offers that seem to be too good to be true. I questioned this one. How on earth could this be a genuine deal? Eventually, almost persuaded against my better judgment, I signed up just two hours before the deadline.
You know what?
>No banker I know enjoys a rate as favourable as that and I feel really smart that I could see a great deal when I saw it…
Of course HSBC hates me, but it’s a large impersonal organisation and I can live with its opprobrium.
Towards the end of ‘Black Box Thinking’, Matthew Syed writes about blame. He describes it as “…a way of collapsing a complex event into a simple and intuitive explanation… if we place the blame on someone else it takes the heat off ourselves. This process can happen at a collective as well as an individual level.”
He makes the point that the narrow focus – which was to blame all bankers for everything – obscured the actual truth. And what was that truth?
“Despite the reckless and possibly criminal behaviour of those bankers, many of us had taken out loans we could not afford to pay back; we had maxed out our credit cards and stretched our overdrafts to breaking point. In other words, we had all contributed to the crisis.
“And if we cannot accept our own failures,” Syed asks, “how can we learn from them?”
He makes a fair point, and I really do feel extremely bad about my mortgage rate and how it brought the world to its knees. And if you ask me what I’ve learned from my mistake it is this: just because banks are big, doesn’t mean that they’re clever and, equally, not every bank is out to cheat you.
This article was originally published on LinkedIn on 2 February.