Risk, Trust and Aspirations of UK Bankers at the Onset of the Global Financial Crisis: A Case of Extremes? "CANCELLED"

Debates over the causes of the global financial crisis of 2008 have pointed at institutional and individual-behavioural causes; a methodological and conceptual dichotomy that is profoundly affecting risk research. Responsibility and also often blame for the Global Financial Crisis have been placed on banking institutions that failed to apply due diligence against a backdrop of inadequate regulation, or on individualised ‘greed’ facilitated by banks that incentivised excessive risk-taking.

But were bankers unique and possibly uniquely extreme in their risk attitudes and, thus, were perhaps recruited into the banking system for this reason?  Or did the banking system facilitate or enhance a (latent) propensity for those entering the banking system to be or become extreme, perhaps ‘money-hungry’ risk-takers?

Using the British Household Panel Survey, this paper compares risk perceptions, trust and aspirations expressed by retail and investment bankers in the UK with those of the general working population at the brink of the Global Financial Crisis in 2008.  In addition, using the data in longitudinal analysis, it explores whether bankers’ attitudes towards risk changed as they spent more time in banking, asking whether institutions and exposure to their cultures shaped and possibly accentuated attitudes to risk taking.

The paper concludes with a discussion of the findings’ implications for the study of risk and risk attitudes.