Quotes About Banking

Investment bankers make money for a living.

Why did investment banking pay so many people with so little experience so much money? Answer: When attached to a telephone, they could produce even more money. How could they produce money without experience? Answer: Producing in an investment bank was less a matter of skill and more a matter of intangibles—flair, persistence, and luck.

Liquidity. When an executive said his bank had plenty of liquidity it always meant that it didn't. At

And he explained that they avoided free checking because it was really a tax on poor people—in the form of fines for overdrawing their checking accounts.

Long Beach Savings was the first existing bank to adopt what was called the "originate and sell" model. This proved such a hit—Wall Street would buy your loans, even if you would not!—that a new company, called B&C mortgage, was founded to do nothing but originate and sell.

The market might have learned a simple lesson: Don't make loans to people who can't repay them. Instead it learned a complicated one: You can keep on making these loans, just don't keep them on your books. Make the loans, then sell them off to the fixed income departments of big Wall Street investment banks

Once, he got himself invited to a meeting with the CEO of Bank of America, Ken Lewis. "I was sitting there listening to him. I had an epiphany. I said to myself, 'Oh my God, he's dumb!' A lightbulb went off. The guy running one of the biggest banks in the world is dumb!

Charles Kindleberger's 1978 classic, Manias, Panics, and Crashes.

When he began to grasp, along with the rest of the world, what big American firms had done—rigged credit ratings to make bad loans seem like good loans, created subprime bonds designed to fail, sold them to their customers and then bet against them, and so on—his mind hit some kind of wall. For

Guys who can't get a job on Wall Street get a job at Moody's," as one Goldman Sachs trader-turned-hedge fund manager put it.

A banking system is an act of faith: It survives only for as long as people believe it will.

Glass-Steagall was an act of the US Congress, but it worked more like an act of God. It cleaved mankind in two. With it, in 1934, American lawmakers had stripped investment banking out from commercial banking. Investment bankers now underwrote securities, such as stocks and bonds. Commercial bankers, like Citibank, took deposits and made loans. The act, in effect, created the investment banking profession, the single most important event in the history of the world, or so I was led to believe.

Could Morgan Stanley please wire $1.2 billion to Deutsche Bank by the end of the day?

There is an ancient rule of financial life—if you owe the bank 5 million bucks, the bank owns you, but if you owe the bank 5 billion bucks, you own the bank—that

In Greece the banks didn't sink the country. The country sank the banks.

I recall that one of the first investment bankers I met taught me a poem. God gave you eyes, plagiarize. A

Here, in 2001, entered Goldman Sachs, which engaged in a series of apparently legal but nonetheless repellent deals designed to hide the Greek government's true level of indebtedness. For these trades Goldman Sachs—which, in effect, handed Greece a $1 billion loan—carved out a reported $300 million in fees.

I hesitate to deposit money in a bank. I am afraid I shall never dare to take it out again. When you go to confession and entrust your sins to the safe-keeping of the priest, do you ever come back for them?

Capping the size of American banks won't eliminate the needs of big businesses; it will force them to turn to foreign banks that won't face the same restrictions.

Banks hold deposits and savings entrusted to them by individuals, by businesses, by governments and by central banks. They put that money to work, helping people to buy homes, for example, or lending to businesses to invest in expansion.

Size is the enemy of excellence in investment banking, particularly when you are trying to put together two different cultures.

I have nothing against investment banking, but it's like massaging money rather than creating money.

Should we think about separating the investment banks from the commercial banks, a new Glass-Steagall? I would be really excited to see that. I think it would be great for the economy.

Separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity and the capital markets and banks being able to perform necessary lending.