I just picked up on a tale at BMO, and its a cautionary one for any Banker, and their leaders.  It speaks volumes about the culture. 

Bearing in mind the story that had been developing over the prior 10 months. 

Feb 2008 – Risk Management under question at Canadian Banks

Oct 2007 – BMO first in laying the groundwork to mitigate against sub prime

May 2007 – BMO: Trading losses swell

May 2007 – BMO and Optionable [Natural Gas] loss saga continues to deteriorate

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With that backdrop, I came across two stories. 

This one from November 28, 2007.  Note the participants from BMO and their bullish approach to the SIV problem.

Fast forward to Deb 20, 2008:

BMO to Take C$490 Million Charge, Support SIVs

Same two participants from BMO – retired and demoted respectively, at the same time as a 1/2 billion dollar write off.  Blood for the Board.

The two people involved held senior positions.  I have no comment to make here on whether in a bank with 35,000 employees they were personally responsible, and whether their boss[es] were culpable. 

The cautionary tale lies in the facts of how the bank dealt with it, and that decisions and comments made today by yourself by you and your staff can have long and far reaching effects on yourself.