From Good Bankers to Bad Bankers

Abstract

1. This chapter is not intended to be a rigid manual or pass any ethical judgement on bankers’ behaviour. Rather, it is a model made up of features that repeat themselves historically around the world, both in developing countries and in developed ones.

Look, Mr de Juan, there isn’t a bank in this country that isn’t bust, but they all report profits and distribute dividends.

What’s more, every Minister believes he owns one of our banks, and they’re always ringing up.

The Governor of the Central Bank of a major Western nation, September 1987

When a bank is going well, its accounts are transparent. When it has problems, it will fiddle them away.

A. de Juan

First written as an internal World Bank working paper in 1986, this article went on to win an international audience and was translated into ten languages, including Russian and Chinese. It was co-published by the World Bank and Oxford University Press in 2002.