Bankers Trust But Verify?

Posted by on April 24th, 2008 at 09:45am

BGR wrote an interesting post today on
Here’s a quick excerpt
Recently Federal Reserve Governor Randall S. Kroszner noted that “market participants must perform due diligence, a process to gather and assess relevant sources of information to evaluate that product. Due diligence is critical because market participants must trust but verify the market-provided information. Potential purchasers, for example, might engage in various activities, ranging from assessing risk exposures through stress testing to assessing the enforceability of contracts that define the requirements of investors, trustees, guarantors, and originators.”
The idea of “trust but verify” is a noble and seemingly well-intentioned idea. However, considering the recent admissions regarding the lack of financial literacy even among the mainstream banking and investment community, the idea of “trust but verify” rings hollow.
What does verify mean? What steps could a banker or investor go through to verify? What should you verify? Verify engenders the thought of quickly calling up and talking with a “knowledgeable person”. Verify engenders the […]

Read the rest of this great post here

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