Exclusive Live Interview with David DeMuro

On June 30, 2009, the former head of compliance and regulation at Lehman Brothers talked with Complinet about the warning signals and events leading up to the Great Crash of 2008, the roles of banks and regulators and the lessons learned as the market tries to recover from the most recent economic crisis.

History repeating itself

A wide range of abusive banking practices were cited by the 1933 Pecora Commission as underlying causes of the 1929 crash. And, once again, malfeasant banking practices are at the foundation of a worldwide economic meltdown.

The perils of letting the good times roll

One of the ironies faced by risk and compliance professionals is that there is considerably less appetite for rigid controls when everybody is making money, and there is little budget for resolute compliance initiatives when markets fail. So, while firms basked in the glory of the good times a catastrophic crash that is now re-shaping global finance was looming.

Breaking the Cycle

To break the cycle described above, firms must be prepared to alter intrinsic behaviors, reward success differently and establish a permanent culture of compliance throughout the entire organization. To do otherwise is to hinder recovery from the current crisis and set ourselves on the path to market failure once again.