Thanks to Tonysan for the link to this article by Alan (having a) Blinder in the WSJ.
I agree with Mr Blinder. The incentives for people to take risks with other peoples’ money greatly outweigh the disincentives. I’ve known many traders who have taken big loss after big loss whilst going for home runs. They lose their jobs but always get another one as banks/hedge funds hire them in the hope of a big pay day. If the trader wins big, he gets a big bonus and his manager gets one too. If he loses, well it’s not our money!
I am not seeing too many of these guys now trading their personal account. They’re mainly brave with OPM!
