Gillian Tett is a senior journalist at the FT. She also has a PhD in anthropology. Her fieldwork was on Tajik goat herders in the Himalaya. She recently reflected on what that background add to attempts to understand the varying fortunes of banks in the current financial maelstrom.


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"…a decade later, my years in Tajikistan are suddenly starting to look a whole lot more useful. For one thing that anthropology imparts is a healthy respect for the importance of micro-level incentives and political structures. And right now these issues are becoming critically important for Wall Street and the City, as the credit crunch deepens by the day. Take the matter of risk and remuneration at banks….one reason for the recent excesses of the credit bubble lies in how bankers are paid. For the emphasis on annual bonuses creates crazy incentives for bankers to gamble with client money – particularly since they don’t pay back these bonuses if deals later sour."

She goes on to discuss how organisational culture – and ideas of affiliation to either bank or a trading group – may account for the fact that "while this bonus system is endemic, it has not produced identical outcomes at the banks. Some (such as JPMorgan and Deutsche) appeared to have ducked the worst of the credit pain, while others (Goldman Sachs) have thrived. However, a third group (Citi, UBS, Morgan Stanley and Merril)l are producing mind-boggling losses".