If a corporation is a person – as Laura points out in reference to GM, below — then a major bank should be seen as nothing more that a big, fallible human being.
I have a checking account at a particularly silly bank where, month after month, they show a balance 15 cents higher than the balance I arrive at counting on my fingers. This isn’t calculus. It’s addition and subtraction, and they should be good at that.
True, it’s a trifling amount, and it’s conceivable that I’ve made a mistake in counting the fingers I’m counting on.
At the other extreme, Bank of America just discovered a fat-finger error of $4 billion that no one had noticed for over five years – not the accounting department, not the finance committee of the board of directors, not their outside auditor, not the Federal Reserve or the Treasury Department with all their stress tests. As one bank analyst is quoted in the New York Times,
“There are signs that controls are not as tight as they need to be.”
Oh, Really? Shame on the Times. Even you or I could have given them a better quote than that. For example:
“They didn’t notice? Right. How big a lump do you have to have in your mattress before you wake up screaming?”
As the Times reported Tuesday, it’s clear that BofA’s management should have caught the error but less clear who else should have caught it. For instance, the $4 billion gap was hiding in the bank’s submissions to the Fed, related to stress tests.
Still, the reporter generously allows, “It should be noted that the submissions contained thousands of numbers …”
Presumably the Fed gets to be counted as a person, too. Any of us could get drowsy sorting through thousands of numbers, and maybe some teller or night watchman or customer who has fewer numbers to deal with should have alerted BofA to the gaping hole in their arithmetic.
In fact, I should probably call my bank about that mistake they’re making in my checking account. Today, it’s only 15 cents, but one tiny leak in the dike and who knows where it might end?