Mongoloid Banking

A funny thing happened today. The bank in Mongolia we were helping to manage through these difficult times on behalf of the Government and a major institutional shareholder folded. Or anyhow we thought that was the story. Endless emails were exchanged, our clients in Europe and our team in Ulaanbataar, concerned as you might imagine, began emergency planning for rapid closedown and perhaps even evacuation. Certain shareholders were livid.

This week in Holland, a most curious parallel has been playing out with the intervention and closure of the DSB Bank, personal property and plaything/piggybank of Mr. Dirk Scheringa. Here, there is muttering about Central Bank incompetence, about bumbling bureaucrats and ridiculous banana-republic practices in banking. Depositors are angry, employees angrier.

In Mongolia, where the bankers are only marginally less bent than the bureaucrats, and the clients of banks are the most bent of all, the seeming closure of our bank has been treated with near-equanimity. As usual in such jurisdictions (but mind, the U.S. was hardly any different this year), the relatively less affluent and connected were the last to know and stand to lose the most. The best connected had their funds long transferred and are laughing in their Cypriot bolt holes or Singaporean flats, cute girls on their arms, and Singapore slings at their elbows.

Hours of speculation and frenetic telephone conferences past, we are satisfied that our team, in any case, is safe for the time being. And it seems, at day's end, that the Central Bank have had second thoughts. Our bank isn't going bust just yet. Maybe next month. Or maybe not at all. Perhaps a recapitalisation would, after all, better serve the public interest. Smoke, and mirrors, and cash are hard at work.

We watch, and wait, and react to the developments, sifting the coffee grounds like gypsies. Only one thing is clear: the most important interests in the country are pushing their pawns and trading their horses, and we are just one of the expendable pieces in the game. Forecasting outcomes requires a dataset we will never access.

And that is just as it is meant to be.