Bob Monks discusses how there is no one way to determine value. ‘Beauty is in the eye of the promoter.’ The collapse of Lehman Brothers and Bear Stearns resulted from the SEC under Christopher Cox allowing banks to set their own gearing ratio.
In part two Monks discusses how the regulatory environment shifts as governments change. Monks also discusses what obligations IROs have as professionals, including under what circumstances they should tender their resignation. ‘They’re not obliged to be perfect, but they are obliged not to mislead people, and at the point they are uncomfortable, they really have no alternative but to resign.’