As the ripple effect of the global financial crisis continues to spread, and its international political, economic and legislative impact continues to grow, key side-effects that were bound to hit various sectors have begun to surface.
The world is focusing on every statement or suggestion made by credit rating agencies with regards to certain countries, banks or geographic zones, stating the financial solvency, economic capability, or probable risks related to them. Any demotion in the rank of a country, bank or zone, or even doubts regarding their status, is tantamount to a massive earthquake that shakes all confidence and damages the reputation of that particular entity, whilst exposing it to serious repercussions.
One of the most significant repercussions is the damaged reputation of those working in the banking sector. The entire profession has become an object of ridicule and scorn, with strong links to fraud and theft. This is compounded by the fact that the majority of global fraud operations over the past few decades have been directly and explicitly linked to senior figures at major international banks, and the central bank staff in countries where thee giant banks operate.
This has caused a decline in banking sector recruitment rates, as employees transfer to related job industries. Job seekers have switched to other kinds of professions that are more respectable in the eyes of society, and less controversial. This trend has reflected upon higher education, particularly those universities that used to enjoy substantial revenues and profit from post-graduate business administration degrees, known as MBA’s [Master of Business Administration].
Today well-known universities are witnessing a sharp decline in the number of those seeking to obtain “MBA” degrees. This has prompted such universities to launch new courses and degrees that have nothing to do with the banking sector; programs that are more concerned with business initiatives, responsible management, and the recruitment of intellectual capital. This move became more common with the continued shocking and painful news about the infiltration of corrupt and suspicious money into giant corporations and financial institutions. In turn, the burdens and responsibilities of official monitoring apparatuses have increased, in order to put an end to what is happening and restore confidence. For a clear example of the outrageous corruption in this sector, we need look no further than the recent news of a Japanese camera-manufacturing company [Olympus], and what has been said about staggering and serious financial irregularities there, and the negligence of the company’s directors in allowing the use of suspicious source of funds, with some claiming that these funds have connections to the Japanese mafia [Yakuza].
Today, there is renewed talk about the imminent disclosure of other companies that have been infiltrated by the funds of the Russian, Ukrainian and Chinese Mafia. This reminds me of an interview I conducted with a correspondent from the “Wall Street Journal”, during a report she was writing about an Arab businessman who was being pursued by the legal authorities, and who owns a substantial share in a well-known European bank. Previously, investigations had been carried out by the bank’s security department, which consisted of influential figures in the intelligence field, most of whom had worked in the official British intelligence apparatus. The department issued a report warning the bank against accepting a bid from the businessman in question, due to suspicions about the source of his fortune. However, this report, as the correspondent informed me, “vanished” at the time. However, it shall surface once again in the near future, with the emergence of fresh and compelling evidence against the aforementioned Arab businessmen, linking him to financial counterfeiting and money laundering cases being heard in a number of courts worldwide.
The financial world is changing, whilst a conflict over the status of its currencies and markets is in process. A great dispute exists within Germany between those who want to return to the old “Deutsche Mark” currency, to rid the country of the burdens of the Euro and its member states, and those who want to keep the “Euro”, absorb its problems and show patience. Returning to the “Deutsche Mark” currency would mean drastic inflation and rising costs. This would limit Germany’s exportation capacity, which it depends upon, potentially leading to a major unemployment disaster and social catastrophes.
All these changes are bound to accelerate the shaping of the new world economic order. New players will emerge on the field and others will be left out. The bulk of the responsibility in the coming period lies with the investigators and accountants who will expose the financial scandals involving such banks and those standing behind them. Only by doing that will respect, competence and confidence be restored to a sector that has turned into a joke and a disgrace to the economy.