The Reckoning – Citigroup Pays for a Rush to Risk – Series – NYTimes.com
But many Citigroup insiders say the bank’s risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings — and executives’ multimillion-dollar bonuses — failed to rein them in, these insiders say. [my emphasis]
This NY Times article points out that the normal risk management controls at Citigroup that should have reined in exposure to CDOs [collateralized debt…] were thrwarted.
“ties that clouded judgment.”
I suppose that is a network liability. Every organization is cris-crossed with network ties. The question is why these had such an impact. Org Culture? Greed? Something structural in the network? The technology of communication?