As much as we like to pretend it never happens to us, we all make mistakes (even Shaggy). One of mine has been not to write a blog post since 2020 but I know you are a forgiving bunch and I have created a shiny new website for you with links to my bi-weekly columns in the Guernsey Press via their website, so hopefully I am forgiven. There is more to come, more often.

Back to mistakes, I spoke on this topic a couple of weeks ago and the link to that talk is here.

I won’t repeat it all but the key takeaway is that as painful as it is, owning up to mistakes, reflecting on what could be done better and making changes is an essential part of being a human. If we see those in powerful roles owning up to mistakes, it frees us to be open too and potentially avoids more costly and dangerous errors. It also then breeds a culture of honesty and openness.

There are huge issues in the global finance world at the moment and these largely stem from banks stretching themselves further than they needed to due to demand from investors. We all like to make more money but when it puts the business model at risk and when as a bank you are at the heart of a financial system on which many other businesses rely, you need to tread carefully and ideally know when to stop. It is not as easy at it sounds. If your major shareholders are pushing aggressively for growth, what do you do?

In recent days, I have not heard many voices from inside saying they [the banks] stretched themselves too far or pushed too hard, only that they were impacted by forces outside their control such as government interest rate increases and the global pandemic. Yet both Silicon Valley Bank and Signature Bank’s business models were heavily concentrated in one sector (tech) and thus they were heavily exposed as interest rates went up. They did not flag this sooner nor did they see this as a risk as it was making them an awful lot of money for a long time. Credit Suisse asking for government help is also a worry. Have they really been honest about how they got here? Is it time for an entirely new approach to global banking? If the regulations are still not providing safety for customers, what will? These are big questions that I don’t intend to try and address here but I am interested in how these bank crises are described and who owns up to making mistakes as they have huge consequences for all of us.

We have all been impacted to greater or lesser degrees by the pandemic, the war in Ukraine and the financial fallout and no-one could have predicted how this might pan out (I fear it is not over yet) but it is not shameful to admit that perhaps we need to be a little more cautious next time, I know I do! I do think we are getting to the stage where we need to reflect on just how much growth is sustainable so that we can all live in a slightly more predictable economy. It might be a naive hope, but I like to think I’m not the only one who thinks this could be better all round.

What is interesting is how hard it is to admit when our own plans are a little punchy. As a financial planner it is even harder for me to talk about these things [I wrote about this here some time ago] as there is always an assumption that my personal planning must be the best out there. As it is, I am human like everyone else and have to work with what life throws at me (a cancer diagnosis and a global pandemic in the last five years would not have been my chosen events!) but I always own my choices.

I chose to leave the UK and move to Guernsey to join my family towards the end of the pandemic in 2021, for example. I am really pleased I did it and I love it here (more on that soon) but it has put me under much a lot more financial pressure than if I had just stayed put. I didn’t know the 2020/2021 financial market recovery was only short-term and could not predict recent events but I did know I was taking on more risk by moving here and I am now under more pressure as a result.

With hindsight I might have done it all a little differently, but perhaps I wouldn’t. I can’t blame anyone else other than myself but that’s OK as it will be me who works my way out of it. I know there are people in much worse positions than me right now and I am grateful to have the opportunity to work to improve things.

Whatever your choices and whatever position you currently find yourself in, it will get better. No-one can predict the future and being optimistic and ambitious is not a crime nor is it anything to be ashamed of. However, sometimes taking a more boring approach will give you security to make that next exciting leap less terrifying. Making sure you are constantly learning from your mistakes, or simply accepting that your choices have got you where you are, helps all of us to live better lives and hopefully it is reassuring to realise that even huge companies (and countries!) can get it badly wrong by being overly optimistic about the future or taking the wrong guidance.

If they can ask for help, so can you.

Here’s the link you were waiting for – it’s uncensored so youngsters beware.

undergroundfox x