HENRY'S GUEST COMMENT: Who's really to blame?

So, let me get this straight. In simplistic terms:

1. Shanice, a single mother of four (by four different fathers) from Alabama who has never had a job in her life, is granted a $180,000 loan for by a mortgage broker spiv for her first home, in true 'American Dream' fashion.

2. Mortgage-broking spiv mis-sells such applicants to lenders, as ifShanice actually has a hope in hell of paying off her mortgage.

3. Wall Street collates together thousands of Shanice-from-Alabamas, wrapped up and sold as CDOs, mitigating the risk that some mortgages won't be paid. As demand for CDOs rockets, broker spivs are offered increasingly attractive terms to provide more sub-prime mortgages.

4. When it's eventually figured the CDOs are not worth the certificates they're printed on all hell breaks loose, with a global meltdown and a financial crisis increasingly looking to rival the Great Depression. And literally 100% of the blame is pointed at 'bankers' - not just the 1% of financiers responsible for structuring and dealing CDOs, but anyone remotely associated with financial services.

Thanks to Obama's finger-pointing, American bank executives whose roles had NOTHING to do with the crisis are inundated with death threats aplenty. Therre are coach tours of AIG executive's Connecticut mansions. On this side of the pond brace yourselves for the "Storm the Banks" riot coming this April Fool's day. Trust me, it will get bloody and it will get nasty.

However, flick over the above timeline of the credit crunch. Are bankers honestly to blame for this mess? Do you really think CDO dealers would have aggressively continued pumping out contracts if they hadn't been mis-sold what proportion would fail? Do you honestly think they would have happily continued trading knowing that they're ripping off clients? No - over the years it's typical to develop good relationships with your clients, and it's awful to see them lose money on your recommendations. Furthermore, the majority of bankers involved would have obviously desired to be in a stable business line, rather than to have a couple of booming years and then be unceremoniously kicked out onto the streets.

The primary responsibility for, cause of and fault for this mess is anyone choosing to be levered up to the eyeballs, living massively outside their means. No degree of ignorance or pushy brokers are an excuse for simple common sense - how on earth can anyone expect to pay off a 6-figure mortgage when they're out of work, or on the minimum wage?

I'm actually delighted this crisis has unravelled, because it will lead to a much-needed positive correction of values and attitudes, both at individual and corporate level, in the longer term:

1. People have hopefully learnt that overleverage is unhealthy - whether that's a family with a 10k household income and 20k of credit card debts on plasma TVs and cars, or a multinational with 20m annual profit but 20 times more debt. The mass deleverage we'll see will bring us into a more sensible, prudent environment.

2. Bonuses now look like they will better reflect longer-term performance of the bank. The most recent bonus structures had a large proportion of the reward deferred over 3 years, often with contingencies making them subject to long-term performance. This will avoid any of the get-rich-quick schemers we saw in the CDO era. We will have a culture more genuinely interested in the long-term interests of the bank. I have no issue with taking home a smaller annual income than previous years - it is still a healthy six figures, and multiple times more than I could earn in virtually anything else - something some peers need to appreciate more.

3. Before the crunch, the financial sector was heavily over-saturated. It is an immense privilege to work in such an exciting, dynamic industry, with financial rewards more than many could have dreamed of, and until recently there were frankly too many people who did not deserve to be a part of it - poor attitudes and work ethic, no passion, and generally being deemed as 'dead weight'. Whilst the mass waves of redundancies have of course not been perfectly meritocratic, it seems evident that the space-wasters at most banks are being cleared out.

There's of course a catch to all this, particularly with the latter point - in this brave new world we now enter, massively delevered and prudent, we face an enormous unemployment crisis. With the UK's optimal population closer to 40m than its present 60m, there's no humane solution to that mess, so brace yourselves for the angry protests this Wednesday, stick it out and ride through the further calamities we all face, and pray for better times to come!! :-)

'Henry' graduated from Cambridge in 2004, and is now a 25 year old Vice President working as an FX trader at a major investment bank. Some of that is not strictly true as he feebly attempts to retain his anonymity (after 4 friends have now figured out who he is), but he is very, very real. You can contact him at henry.efc@googlemail.com.