Well all three have failed largely due to arrogance, but there is a bit more to it.
Lets start with PLUS. This small stock exchange managed to spend several times its annual revenue for years whilst failing to build a market. The Directors took excellent salaries and whilst they built what could have been a fantastic market, they saw themselves as regulators. Simon Brickles showed great promise but failed and why his successor was chosen at all will remain a mystery forever.
The problem of PLUS was simple – they refused to be a market, but wanted to be a regulator and they were not even any good at that. Had PLUS been alert it would have taken the 500 companies on lower AIM and in time transformed itself into a comprehensive equity based crowd funder backed by a trading platform. It had every opportunity to be a stunning success but PLUS wanted to regulate but of course nobody wanted or needed this. There are plenty of regulators about and they spend enough time annoying all of us.
Jamie Dimon wanted to become a regulator also. Having missed the job at Treasury he was angling to run the Federal Reserve. After all he is estimated to be worth more than $200 million, all made as a paid employee, so he needed the power not the money. In the meantime Jamie told everyone the banks could regulate themselves whilst ignoring the warnings that his gambling operations were losing a few billion.
In theory we can all regulate ourselves but as management you do have to keep your eyes and ears open. Having taken £25 billion or so in TARP funds courtesy of the US taxpayers Jamie was the last to figure out that there was a “whale” in his organisation (bit like the elephant in the room). Even more embarrassing is that the whale was again using those wonderful derivatives which caused the whole economic disaster we are in anyway. It proves that the management of JP Morgan and the regulators have learned absolutely nothing. But no worries as JP Morgan is too big to fail and with Jamie at the Fed driving seat the future appeared very bright.
Of course one might ask where the Bank of England was in all this or the FSA or whatever other regulator we have around here. The whale was in London and everyone knew that but Mr King was strangely quiet on the issue as he ranted about Eurozone problems. Of course regulators don’t use silly things like Bloomberg. They use sophisticated tools like people (no doubt highly paid) to work within major banks. So whilst the regulators were contemplating their next salary slips and pensions several hedge funds made a lot of money cleaning out the whale and JP Morgan.
So that gets us nicely to Greece. After all Jamie D is of Greek descent so he has some interest. The Greeks do not want to leave the Euro. Most of the people who are affected by the austere regulations put on them by the very very well paid bureaucrats living in much less pleasant climates, are simply fed up paying for the problems caused by those same regulators. The Greeks have overspent, encouraged by banks and major companies, but even worse they have never been successful in getting taxes paid. In fact my impression is that no regulation has ever worked in Greece, so why anyone gave them all that money in the first place is unclear. Banks and regulators made bad business decisions and now the taxi drivers have to pay.
Back to the question what the Greeks, Jamie Dimon and PLUS have in common? They have all found that regulation does not stop simple stupidity and they should have stuck with keeping eyes and ears open whilst doing business. Increasing regulation will not solve the problem; it will only increase the number of jobs worths.