The Fourteenth Banker Blog

About The Fourteenth Banker

I created this blog as a home for bankers who need to speak out and do not have a central clearinghouse or a safe place to do so. Big banks now treat their employees like property, bought and owned. Typically employees must subject themselves to all sorts of potential sanctions, forfeitures of compensation, clawbacks and even lawsuits if they speak in ways we often have thought were protected speech.

I am not talking about revealing confidential customer or proprietary information, I am talking about simply commenting on a company, management philosophy, making general observations or raising concerns.     In today’s big banks, gag orders are written in the most intimidating way, included in Codes of Ethics, attached to incentive plans, posted on the company home pages. We should ask ourselves, what is the big secret?

Our financial system lacks the accountability to make it honest. I wish I could reveal more in these pages. The matters I discuss are always in the public record already or are just common sense editorializing. What underlies my perspective is my actual experience in working for a large bank, and the experiences of others I converse with who remain un-named.

I advocate strong and effective regulation to reduce systemic risk. Dodd-Frank did not do what it could have if it were not written under the influence of corporate lobbyists. It did not accomplish the single most effective thing it might have, the shrinking of Too Big Too Fail institutions and the restoration of a version of Glass Steagall that would have separated commercial and investment banking.

I advocate consumer regulation to bring simplicity and transparency to every day people who do not assume that every transaction should be undertaken with the warning, “buyer beware”. I favor a free market where those who fail, fail. The bailouts should have exacted a higher price to equity holders and bondholders. Instead, losses were taken by taxpayers and countless individuals and businesses large and small. Many millions remain struggle today. I do not favor just a mass of regulation. It should be strong and effective, but moderate in cost to comply. For every new regulation, one or more outdated regulations should be eliminated. One issue is the regulation, another is the enforcement. If penalties are simply small fines and individuals do not have a consequence for their unethical behavior, no meaningful progress will be made. There must be strong civil and criminal sanctions against predators, whether corporations or individuals. However, executive managers must not be able to simply throw sacrifices to the wolves. It is executive managers that create the cultures of predation. So they must be held accountable for what they create in their employees. This is a complex problem which must be addressed in a manner that does not stifle enterprise. I am not saying it is easy.

I favor a free market where new banks and new capital come into the industry to power innovation and entrepreneurship. Government policies where weaker institutions are constantly rolled into larger ones are counter productive. We need radical disruption in the financial services space. We need 20 new bank models to complete with the old and give people choice. The industry should not be monolithic. Regulation alone will not solve every problem. It falls on the citizens to vote with their money. The citizens can shrink the Too Big Too Fail banks. But they must have good alternatives.

I was read something just today that gave me hope. “Innovation constantly alters the character of the economy”.

Innovation in our own hearts and minds and new institutions that reflect our consciousness, can alter the economy.



  1. I like the red pen on the masthead. Go team!!

    Comment by Ted K — April 5, 2010 @ 2:12 PM | Reply

  2. Mr. Fourteenth Banker,

    Do you have an email where we can communicate? I’d like to share information with you off-line and, of course, respect your need to be anonymous as well.


    Comment by Curious — April 5, 2010 @ 2:55 PM | Reply

  3. I am incredibly excited to see this blog. I am also a TBTF banker and want to see the system changed. I concur that free market idealism is being used as an excuse for the current state of affairs. My endgame is to work the system from within to affect a better outcome. I’m working to learn as much as possible now, so when the time does arrive WE can make the system better. I hope that I will be able to help you and the cause; let me know if I ever can. Thank you for starting this.

    Comment by W — April 6, 2010 @ 1:08 AM | Reply

    • Have you lost your marbles? Note the name of the blog and absorb the reference. We’re talking about speech here, that – had it not been stifled from inside – could’ve saved our global economic system from taking a dive into the crapper. Speech that is REQUIRED by firms’ Code of Ethics and Codes of Conduct, but that when exercised, lands the speaker with a Pink Slip. Ideas, that had they been heard and implemented, could have preserved the savings and jobs of millions of taxpayers. We’re talking right and wrong here – not what kind of shenanigans you can ‘legally’ get away with. There were and ARE big problems at our banks – and no one who has been there, seen it first-hand, and knows how to make our banks better by doing something about it – is permitted to talk about them, because the banks have bought our silence? I think not.

      Comment by Lucy Honeychurch — April 7, 2010 @ 6:28 PM | Reply

      • Sorry, my comment meant as a reply to Jon Jacobs’.

        Comment by Lucy Honeychurch — April 7, 2010 @ 6:30 PM

  4. Since when has any speech ever been “protected” from reaction by one’s employer? At least you’re smart enough not to invoke the Constitution, the way a former colleague used to do incessantly (any time anyone did or said something that rubbed him the wrong way, he’d declare without a trace of irony, “That violates the Constitution!”)

    The fact that people can be (and regularly are) disciplined for bad-mouthing employers is hardly unique to banking. It’s the norm in all industries in the U.S., and probably in the rest of the world too. (I was about to say “the rest of the capitalist world.” Then I realized – April 1 is already past, so I certainly wouldn’t want to be perceived as implying workers are any freer to speak their minds in, say, China or Libya than in Frankfurt or Chicago. Though I can think of one category of speech that is legal in Tripoli but sanctionable in Frankfurt.)

    What’s more, most restrictions on the speech of financial employees arise out of government regulations, as you alluded to above. And what is the overriding purpose of the bulk of those regulations? Why, to protect the investing public. What good would it do to have full disclosure rules for financial products, for instance, if bank employees were free to speak on their own (i.e., if the regs didn’t include provisions requiring banks to appropriately “supervise” ALL public communications of ALL employees)?

    Your boss is paying you, either to work or (in the case of severance agreements) to go away. So why shouldn’t he or she have the right to insist you keep your mouth shut as part of that deal? I can see allowing an exception for cooperating with duly constituted law enforcement authorities, or private whistleblowing through designated channels. But your desire for free speech (as you worded it above) seems to go well beyond that. So why do you expect to exercise your free speech rights on your boss’s dime?

    Comment by Jon Jacobs — April 6, 2010 @ 3:09 PM | Reply

    • I am not a constitutional lawyer. However, I do believe in free discourse and that the conduct of our banks should be discussed by bankers as well as pundits. Perhaps the initial posts here appear to demonize the sector as a whole or even TBTF banks in their entirety. TBTF banks represent a massive and critical resource in our economy. Every day millions of transactions take place which serve commerce and sustain our relative comfort. However, they could be so much better and do so much more. Most importantly, the productive capacity of the bank employees could be unleashed in more open and flexible organizations.

      Likewise, every bank has some combination of a constructive or destructive effect day in and day out. When it self destructs, as many smaller banks do (as well), it does collateral damage. So as we discuss the industry we will begin looking at possible constructive changes.

      Do you feel that our prosperity has been served by quashed speech? When is it reasonable to engage in speech that the official corporate structure might not find to their liking. Would you have liked someone to speak out when Enron did its version of God’s work? Would it have been nice if someone in Bernie Madoff’s organization had said something?

      Regarding disclosures, more bank disclosure restrictions are either related to consumer protection or to customer privacy. SEC restrictions are another matter far too long to post on today. I personally think investors would be better served by more transparency rather than less.

      Comment by thefourteenthbanker — April 7, 2010 @ 1:18 AM | Reply

  5. I came across this from Zero Hedge. If everyone here is who they say they are, I’m impressed that you have started a blog to speak and am very curious to see how this evolves.

    There has been many attempts made to calculate the true cost thus far in terms of dollars . There hasn’t been much discussion as far as lost prestige for the country. It’s quite possible that the country could be blamed for spreading the financial equivalent of the black plague world wide. I wonder if you all would speak to that.

    How do you feel about the apparent acquiescence of DC to your industry leaders demands that, has, by all appearances, put the country itself at financial risk. What about the FASB rule change that seems to have led to financial statements that are less than forthcoming in that they make the corporate scandals that started the decade seem like minor league warm-ups for the main event ?

    Most importantly, how and when do we get back to when it was just bad, as most think this is not sustainable as it stands? Is it possible?

    I’m sorry to intrude as I’m not an insider and am marginally qualified to speak to these matters, but as Washington apparently seems willing to do the bidding of the heads of your banks, it is critical that people understand in plain language from the people on the inside what the potential downside risk of a status quo policy may be.

    It’s very possible only the people that are there on the inside can let outsiders who don’t know how much danger they are in and explain to them that what we are hearing by our politicians may be ill informed or an outright lie and why we are hearing it.

    In other words , if you are who you say you are, are you up to saving your country?

    Comment by Dburn — April 8, 2010 @ 4:40 AM | Reply

  6. I knew there were honest bankers out there (besides my bankers, of course) 🙂

    Comment by Gayla — April 9, 2010 @ 2:59 AM | Reply

  7. Not in your industry, but you’re quickly becoming a favorite blog and I’m sharing with friends. I do wish you success, both as a blog and an instrument of change.

    Best wishes.
    Jim Krupp
    Amherst, MA

    Comment by Jim Krupp — April 9, 2010 @ 10:13 PM | Reply

  8. Fourteenth Banker,

    Suggest you add these links to your blogroll.

    Kansas must be a very interesting place. William Black, Michael Hudson, Thomas Hoenig are Kansas-based. Post-Keynesian theory is new to me. If you have not heard of this theory, highly recommend you check out the links.

    Very best in your adventure in the blogosphere.

    Comment by tippygolden — April 12, 2010 @ 2:17 AM | Reply

  9. Go get ’em!
    I found you on HuffPo.

    Comment by Heather — April 14, 2010 @ 12:43 AM | Reply

  10. What are your thoughts about regaining some of the lost small-business loan opportunities through state-run banks like the Bank of North Dakota?

    Comment by Mark Stewart — April 14, 2010 @ 12:54 AM | Reply

  11. I just read your interview on huffpo. The overwhelming thought that came to mind was this: Enron. It was the off-balance sheet activity and the triggers on them that caused Enron to fall, but it was the incentive practices that made the OBS activities so attractive and the pure free-market thinking that made it possible in the organization.

    A few incentive practices that make the risk-aversion practices that create long-term wealth (as opposed to quarter-to-quarter performance) are available.

    Comment by MM — April 14, 2010 @ 1:02 AM | Reply

  12. It is great that you are doing this. Really great. It’s unfortunate that so many bankers are not brave enough to do this. However, you are not much different than they are. I do not mean to belittle what you are doing. But it is very easy to criticize the industry anonymously. The day a group of bankers realizes that they should quit their job and come out and tell the truth and expose the subversion of Wall Street is the day financial reform passes and our nation’s financial future becomes more secure. Continuing to work at these immoral firms is a bit hypocritical—it’s very easy to criticize while you are still living well and hiding behind the veil of anonymity. Come out and fight for all those devastated by a bunch of greedy financiers.

    Comment by Appreciative yet Outraged — April 14, 2010 @ 2:03 AM | Reply

    • William K Black came out on April 20th, when testifying before Congress about reform, and called this debacle exactly what it is: a result of systemic fraud and corruption in the banking/finance world.

      Did you even know that? Did anyone?

      Even when credible people speak, our government does nothing. The media have been noticeably unable to cover or even mention Mr. Black’s speech – the only truthful thing to come out of those hearings.

      So, who are the criminals here? We have our 14th banker, but where will our 536th government official come from?

      Comment by Pj — April 23, 2010 @ 2:59 AM | Reply

  13. It seems to me, as an outside observer, that our country needs as much of this as possible. I think we are in a very bad place these days and the few at the very top who can protect themselves are doing what they do, they protect themselves and the system they built. But is that reason to decide that what is broken can’t be fixed? Please speak up, and from your position of expertise question your congressmen and senator’s closely. Demand answer’s of them and have a friend film the exchange for YouTube. It’s easy enough to discover where they will be speaking to constituent’s, just call their office. And you know what? A person generally feels a tad better for having done something like that, fruitless in the short run that it might be.

    Before I retired I was an activist in my union and maybe the one real lesson I took from the experience is the old labor saying that a union is made of ordinary people determined to do an extraordinary thing. Changes can be made if enough people can be convinced to pitch in.

    Comment by Michael — April 14, 2010 @ 2:27 AM | Reply

  14. Until you take a stand and testify publicly, all you are accomplishing with this is cowardly personal catharsis. Your talking to me about ‘doing what is right’ is not credible until your actions include personal sacrifice greater than telling the truth while hidden behind a veil of secrecy intended to make you feel better about yourself without jeopardizing your bonuses and perks. You can’t have it both ways. You are what you are and do what you do because of how you were raised and your own value system, not because someone is twisting your arm and making you do it. Stop blaming your bosses and the system and take a harder look at yourself for you are to blame as well. Until you understand that you must hold yourself accountable, you will accomplish nothing.

    Comment by Courage the Cowardly Dog — April 14, 2010 @ 2:36 AM | Reply

  15. “I believe in the free market.”

    Therefore, speak.


    (I’m not from banking myself but I’m an interested reader.)

    Comment by Kitty — April 14, 2010 @ 3:24 AM | Reply

  16. You people are DAMNED and DOOMED! So accept your fate and be humble and gracious about it!

    Comment by Paul Collins — April 14, 2010 @ 3:25 AM | Reply

  17. THank you

    My father and stepfather were both bankers. They would be thrilled to know there are people like you still out there.

    Comment by blake — April 14, 2010 @ 3:53 AM | Reply

  18. I used to work for a major bank up until June 2008. I worked in Operations and was shown the door. Why? It certainly wasn’t due to my performance as I was always rated either Exceeds or Far Exceeds. It was because I rocked the boat so to speak. I fought for my employees. I was tired of the incentive system. Here my employees would come in and do exactly as I ask them to do and some going above and beyond, but when it was time for performance reviews I was told I could only rate some high and would have to rate some low. And yet the CEO’s and the upper management is cashing million dollar checks. Then next thing you know as they are still cashing those million dollar checks they begin to lay people off.
    The sad part is that I enjoyed working at the bank. I loved the challenge of leading a team of people to a common goal for the bank. My loyalty was deep with my employer and yet when it came down to it, I was shown the door because I fought for my employees. I was literally told by my boss that I need to learn to “tone it down” and “not worry” about my employees so much. Fight for myself and not for them. I have values and my value system wouldn’t allow me to do that.

    Comment by John — April 17, 2010 @ 4:08 AM | Reply

    • John – I had the same experience in evaluating my employees’ performance at my large bank.

      Forcing performance rankings to follow an equal distribution – same number of 1s as 5s – is an obvious disincentive to performance. It means that however hard you try to excel, you will always be ‘handicapped’ by the curve.

      It’s also a great disincentive to good management. My reaction was, ‘shouldn’t all my people be 4s and 5s? … and if not, doesn’t that reflect that, as their manager, I’m doing something wrong?’. The answer from my boss, the CFO, was ‘this is how we control incentive comp. expenditures – if everyone is ranked 4 or 5, then we couldn’t afford to pay them.’

      Completely bassackward thinking.

      Comment by Lucy Honeychurch — April 19, 2010 @ 10:37 AM | Reply

  19. […] Blog as a home for bankers who need to speak out and do not have a central clearinghouse or a safe place to do so.Close […]

    Pingback by About The Fourteenth Banker « The Fourteenth Banker Blog - Viewsflow — April 23, 2010 @ 9:45 AM | Reply

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