Forum Archive Index - September 2001

[Marilyn Munroe <who.c@res.co.nz>]

The fact a well run bank with a reputation for financial probity, can get
it so wrong illustrates my phobia against investments in financial service
providers.

The instance I refer  to  is the US$1.7 billion hit taken by the National Australia Bank due to a fault in the financial modeling software in its United States mortgage provider subsidiary.

When a manufacturer or services company declines the fall takes a period of time. Financial services providers often just go bang! Your investment in such a company can vaporize in the flash of a profit announcement.

The fact that NAB is a well established well run bank means that they are able to pay a dividend, but how well are other financial service providers managed?

Boop-boop-de-do Marilyn

P S It is often difficult to visualize $1.7 billion. Expressed in figures it is 1,700,000,000.
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