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Since the financial crisis began in the fall of 2008, bankers have become our new favorite villains. But John Terrill, director for the Center for Integrity in Business at Seattle Pacific University, makes the case that investment bankers can be doing the Lord’s work :

Outrage at investment bankers, with their year-end bonuses and perceived arrogant manner, seems well deserved. Lloyd Blankfein, chairman and chief executive of Goldman Sachs, recently described himself to the  Times Online as “just a banker doing God’s work.” Unsurprisingly, he was savaged by the public and the press for his comment . . . .

It’s important to acknowledge that we can’t blame the global recession entirely on investment banking or commercial banking. They contributed to it, but are not the only reason we’re in this mess. Jamie Dimon, Chairman and CEO of JP Morgan Chase, outlined many of the underlying causes in his 2008 Letter to Shareholders. Banks contributed—certainly to the housing bubble—but there were glaring regulatory lapses, especially in the mortgage industry and with Fannie Mae and Freddie Mac. “Pro-cyclical” policies, such as loan loss reserving and mark-to-market accounting, according to Dimon, also played a role, as did the ensuing freeze of credit and financial markets. Consumers are culpable, too. Seduced by artificially low interest rates, they borrowed and consumed at unsustainable levels. In October 2008, credit card debt in the United States reached $1 trillion, a 25% increase in just five years, according to the Federal Reserve.

Furthermore, the work of investment bankers is complex and technical, and many of the products and services don’t seem tangible, which, if you are like me, heightens your suspicion. In general, investment bankers help clients with capital: issuing stocks and bonds; trading securities; identifying and negotiating corporate mergers and acquisitions (M&A); and assisting with myriad other financial advisory services. They’re like the circulatory system in a body, facilitating the flow of capital and other assets to entities that need it most and will put it to best use.

Read more . . .

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