Magazine article Global Finance

Stand and Deliver

Magazine article Global Finance

Stand and Deliver

Article excerpt

Three authors on modern business.

The end of the great stock market boom and the subsequent flood of corporate scandals have unleashed a tidal wave of books on the iniquities of the market system, many of them run through with the unmistakable tang of hindsight. But there are some that rise above the mass, either because the author has made a determined, measured effort to dissect the beast, or because the writer has, indeed been calling 'foul' even when the crowd was cheering on the quarterbacks. John Plender's book on the crisis of legitimacy in capitalism meets the first test; Prank Partnoy's latest book builds on themes that first emerged in his 1998 book F.I.A.S.C.O, Blood in the Water on Wall Street .A kind of financial 'kiss-and-tell', that book caused uproar with its tales of sharkish behavior from sellers and traders of derivatives. The UK regulator Howard Davies infamously called it "a nasty little book." Any one else who had much contact with that world instantly felt a shiver of recognition.

Now a law professor in San Diego, Partnoy's tone is a little wryer but no less angry as he plays his fire across a wider arc-the boardrooms of corporate America. That's well-travelled ground now, of course and Partnoy's second book lacks the raw shock of the first-hand tales of trading room wrongdoing that made F.I.A.S.C.O essential reading.

Still, the central message of Infectious Greed bears repeating-that the size and complexity of the booming over-the-counter derivatives markets has far outstripped the ability-and let's face it, in some cases, the will-of regulators to get a grip.Add to that the asymmetrical nature of the risk-reward structure governing both sides of the buy-sell divide and you're left with a poisonous cocktail.

The imbalance between risk-taking CEOs and shareholders left carrying the can lies at the heart of John Plender's book, Going, off the Rails. …

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