Vogue and Banking

I am reading the biography of a former top US financial regulator, a humble woman from humble Kansas who did her utmost to maintain the safety of the banking system in the pre (and post) crisis years. She appears as a Joan of Arc of sorts, fighting not only the big banks but also those other regulators eager to please those under their watch. It is hard to not feel sympathy towards this woman, with her apparently perfect All-American family and her unfettered concerns for the little people.

And yet we are not sure if many people would want to be like her. Even those who admire her honesty and determination to keep things safe may shy away from trotting her path, instead rather choosing the precise opposite.

This goes to the heart of who becomes a regulator and who becomes a banker-trader. These are two very different species, and generalizations can often be unfair. But here is one generalization: it is a safe bet that the college sports star or the high school beauty queen won´t want to go into regulation, while dying to go into banking-trading. These days that would also extend to the top science student, finance having become so much more complex. Beautiful, well-built, always-successful people can be found roaming trading floors and corner offices. These types don´t want to regulate. They leave that chore to other types.

In one highly illustrate part of the book, Vogue magazine eventually refuses to show pictures of the woman regulator because they don´t think she is attractive enough. For the world´s most beauty-conscious people, this woman is second class. Not part of the club. Of a different (worse) status. Most telling is the regulator´s naive enthusiasm at the thought of being considered by Vogue. You can detect decades of yearning to be called on by the cool crowd. And then the sad resignation when, once more, you are put in your place.

People who could be in Vogue and who have always read Vogue and who know those who are in Vogue and who date those who are in Vogue want to work and work for Goldman Sachs or Blackrock. Never in a million years would they want to work for those who regulate Goldman Sachs or Blackrock.

This explains a lot of what happens in finance. Many regulators have always wanted to be like the regulated, even if they honestly want to confront the latter´s most dangerous practices. And it can be hard for the average girl who always looked up to the people in Vogue to be too tough on those beaus who actually reside in a Vogue world and who have to keys to such universe.

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