Remember that rogue trader Kweku Adoboli who lost UBS $2 billion from an unauthorized trade earlier this month? Since his arrest, some have characterized his actions as inexplicably irrational and impulsive.
The 31-year-old, who had been based in London for the Swiss bank, is currently in jail. Since his disastrous trade, UBS bank chief executive Oswald Grübel has had to resign over the scandal--the third major embarrassment to strike UBS in just a few years.
Various commentators have gone so far as to say that the behavior of both Kerviel and Adoboli was completely irrational; almost psychotic. But now, according to a recent study, that characterization my be insulting to actual psychopaths.
According to a new study from the University of St. Gallen in Switzerland, tests that pitted a group of stockbrokers against a group of actual psychopaths in various computer simulations and intelligence tests found that the Wall Street traders were more reckless, competitive, and manipulative.
Researchers at the Swiss research university measured the readiness to cooperate and the egotism of 28 professional traders who took part in computer simulations and intelligence tests, reports Der Spiegel.The results of the brokers, compared with the behavior of psychopaths, surprised the study's co-authors, forensic expert Pascal Scherrer, and Thomas Noll, a lead administrator at the Pöschwies prison north of Zürich.
“Naturally one can’t characterize the traders as deranged,” a prison administrator who co-authored the study told the German newspaper.
Deranged or not, the tests show that the stockbrokers “behaved more egotistically and were more willing to take risks.” But not the good kind of risks. The brokers took risks calculated to ensure the loss of their competition rather than secure their own personal gain. According to the report, "the traders were not even attempting to maximize their scores so much as to gain a competitive edge."“They spent a lot of energy trying to damage their opponents,” the administrator said. Using a metaphor to describe the behavior, Noll said the stockbrokers behaved as though their neighbor had the same car, "and they took after it with a baseball bat so they could look better themselves."
Instead of taking a sober and businesslike approach to reaching the highest profit, "it was most important to the traders to get more than their opponents," Noll explained.
The researchers are currently unable to explain this penchant for destruction. Perhaps money really is the root of all evil.