This past Friday the Academy Building of the prestigious Dutch Leiden University filled up with students eager to know more about the financial crisis and its consequences.
The master class, organized by the student council of the local Rabobank branch, included some distinguished speakers: Ir. Merel van Vroonhoven, Chairman of the Executive Board of the AFM (The Netherlands Authority for the Financial Markets), Drs. Pim Mol, director of Communication and Corporate Affairs of Rabobank Nederland, and Prof. mr. Drs. Matthias Haentjens, professor of Financial Law at Leiden University.
Though all three held interesting and insightful presentations, it was Ms. Van Vroonhoven who managed to captivate the audience best, with a relative simple but nonetheless enthralling story that combined her personal experiences with general lessons to take from the financial crisis.
Non-surprisingly, the number one question arising during and after the crisis was: who has done it? The reckless bankers, the failing regulators, the negligent accountants, the sleeping politicians or the ill-informed consumers? According to Ms. Van Vroonhoven it is simple: all of the above.
She identifies the mentality of all people involved as the primary cause of the financial malaise. It is the result of people who forgot to think properly about what they are doing and what they are supposed to be doing. The financial sector that was too busy ensuring its short-term success, hereby forgetting to properly inform their customers and clients about what exactly they were selling them. The consumers in turn are not blameless either: in stead of making well-informed decisions they let themselves be easily and sheepishly persuaded into accepting offers that would not turn out to be in their benefit. In the same manner basic flaws can be identified in the behaviour of each of the blamed groups mentioned above.
So what has changed? Obviously, a lot of extra regulations have been imposed. But though helpful, it is not in these words on paper that we should look for the answer. As the director of the AFM, Ms. Van Vroonhoven has conducted a lot of talks with notable representatives of the groups involved. According to her, what stood out in these conversations was the seeming willingness to change. The alteration of mentality she so passionately advocates seems to have gotten through into the heads of those responsible. But she warns that this is just the first step. What happens when the crisis and its impacts have faded in a few years, and the tendency to fall back on old ways resurfaces? The answer, according to Ms. Van Vroonhoven, is simple: diversity.
Only by making sure that in the future the people making the decisions are not a uniform clique of same-minded individuals, but a dynamic and diverse group of critical thinkers that are not afraid to point out each others flaws, the faults of the past can be avoided. Thus, she concludes, the answer to the crisis should be diversity, a critical attitude and innovation. Words not wasted on the young ears of the student crowd present.
We at GRC are eager to know what you, our members, an incredibly diverse and experienced community, think about the subject. Are the issues pointed out by Ms. Van Vollenhoven really the most important things to learn from the crisis? Or should other questions be posed and/or different answers given? Please feel free to leave your opinion!