At Salomon we asked, "Where is the list of things you won't do because they’re beneath you?" We never saw it. Envy and greed lead people to doing almost anything that looks profitable and does not require use of a machine gun. Investment bankers were better when I was young. They used to care about the quality of deals – they cared a lot. Ethics attenuated a lot. This was not good.
The deterioration would be an interesting subject for social science. You'd have to understand psychology – it would be very difficult for somebody to do it.
Why is the high road the best way in investment banking? It's not very crowded. [Laughter]
Seems a bit more relevant in the wake of the SEC's charges of fraud against Goldman Sachs. Today, many investment banks still seem to have no such list and a trading culture dominates.
A big overhaul to Wall Street's culture via changes to incentives (toward "long-term greedy") and requiring that the senior players once again have more skin (ie. more of their own capital) in the game seems badly needed.