Faith-Based FinanceJuly/August 2019 39
the lack o oversight. (And a few
anthropologists, such as Karen Ho, did
do studies on Wall Street, noting these
patterns.) Sadly, however, these dangers
went largely unnoticed. Few people
ever pondered how the original, social
meanings o “bank” and “company”
might matter in the computing age, and
how tribalism was undermining neat
market theories.IS PAST PROLOGUE?
A decade after the crisis, it may be tempt-
ing to see this story as mere history.
In 2019, Wall Street is conÃdent again.
No, the market is not as complacent as
it was before 2008; Ãnanciers are still
(somewhat) chastened by the 2008 crash
and hemmed in by tighter scrutiny and
controls. Regulators forced banks to
hold more capital and imposed new
constraints on how they make loans or
trade with their own money. Formerly
gung ho investment banks, such as
Goldman Sachs, are moving into the
retail banking sector, becoming ever so
slightly more like a utility than a hedge
fund. The return on equity o most
major banks is less than hal o pre-
crisis levels: that o Goldman Sachs was
just above ten percent in early 2019.
Everyone insists that the lessons o the
credit bubble have been learned—and
the mistakes will not be repeated.
Maybe so. But memories are short,
and signs o renewed risk taking are
widespread. For one thing, Ãnanciers
are increasingly performing riskier
activities through nonbank Ãnancial
institutions, such as insurance compa-
nies and private equity Ãrms, which
face less scrutiny. Innovation and
Ãnancial engineering have resurfaced:
the once reviled “synthetic ²£s” (²£shad risk-management systems in place,
with Áashy computers to measure
all the dangers o their investments. But
the Wall Street banks also had siloed
departments that competed furiously
against one another in a quasi-tribal way
to grab revenues. Merrill Lynch was
one case in point: between 2005 and
2007, it had one team earning big
bonuses by amassing big bets on ²£s
that other departments barely knew
about (and sometimes bet against).
Traders kept information to themselves
and took big risks, since they cared
more about their own division’s short-
term proÃts than they did about the
long-term impact o their trades on the
company as a whole—to say nothing o
the impact on the wider Ãnancial
system. Regulators, too, suered from
tribalism: the economists who tracked
macroeconomic issues (such as inÁa-
tion) did not communicate much with
the ocials who were looking at micro-
level trends in the Ãnancial markets.
Then there was the matter o social
status. By the early years o the twenty-
Ãrst century, Ãnanciers seemed to be
such an elite tribe, compared with
the rest o society, that it was dicult
for laypeople to challenge them (or for
them to challenge themselves). Like
priests in the medieval Catholic Church,
they spoke a language that commoners
did not understand (in this case, Ãnan-
cial jargon, rather than Latin), and they
dispensed blessings (cheap money) that
had been sanctioned by quasi-sacred
leaders (regulators). I an anthropologist
had been let loose in a bank at that time,
he or she might have pointed out the
dangers inherent in treating bankers as
a class apart from wider society and the
risks raised by bankers’ blind spots and