Outsiders to the financial world, growing increasingly angry over such events as the recent loss of $2.3 billion by UBS thanks to a rogue trader's actions, may be wondering why such behavior seems so pervasive in the world of high finance.
The results of a Swiss study may come as no surprise to people already inclined to think the worst of an industry that has seen a parade of events that included another rogue trader's loss of billions at Société Générale just a couple of years ago.
Der Spiegel, the popular German weekly magazine, reported that a new study at the Swiss research University of St. Gallen found that stockbrokers' behavior tops that of psychopaths when it comes to manipulation and recklessness. Psychopaths exhibit, among other characteristics, charm, dishonesty, callousness and a fondness for irresponsible behavior, according to a Scientific American article about the personality disorder. Certainly the loss of some $2.3 billion via trades that should never have been made matches up with a couple of those. They also feel little, if any, guilt and tend to blame others for what they have done.
The Swiss study's co-authors, forensic expert Pascal Scherrer and Thomas Noll, a lead administrator at the Pöschwies prison north of Zurich, compared the behavior of some 28 professional traders who took part in computer simulations and intelligence tests with the behavior of psychopaths who took the same test. Among the personality traits studied in the research were willingness to cooperate and egotism. The findings were quite remarkable.
