96 Cornell L. Rev. 1209 (2010-2011)
Chasing the Greased Pig down Wall Street: A Gatekeeper's Guide to the Psychology, Culture, and Ethics of Financial Risk Taking

handle is hein.journals/clqv96 and id is 1221 raw text is: ESSAY
CHASING THE GREASED PIG DOWN WALL
STREET: A GATEKEEPER'S GUIDE TO THE
PSYCHOLOGY, CULTURE, AND ETHICS OF
FINANCIAL RISK TAKING
Donald C. Langevoortt
INTRODUCTION    ................................................. 1209
I. SKETCHING OUT THE COGNITIVE MAP .................... 1215
A. The Centrality of Corporate Culture................1215
B.  Adaptive  Cultures................................... 1217
11. INSTITUTIONAL RISK PERCEYTION......................... 1221
III. THREE VARIATIONS ON A THEME BY CHUCK PRINCE ....... 1224
A.  Feeling  the  Music  .................................. 1224
B.  Dance  Competition................................. 1228
C. Dancing for the Crowd ............................. 1231
IV. GOLDMAN SACHS AND GOD'S WORK ...................... 1234
V. INDIVIDUALS WITHIN CULTURES .......................... 1241
CONCLUSION    ................................................... 1243
INTRODUCTION
Of all the questions about why the recent financial mess hap-
pened, the most perplexing have to do with the immense risk taken
on by supposedly sophisticated financial institutions.' There were
many different kinds of transactions that shifted subprime mortgage
t Thomas Aquinas Reynolds Professor of Law, Georgetown University Law Center.
This Essay is an extension of the Day Family Ethics Lecture given at Cornell University in
April, 2010. My thanks to Claire Hill, Dana Radcliffe, Mitt Regan, Avishalom Tor, at-
tendees at the Day Lecture at Cornell, and workshop participants at the University of West-
ern Ontario for their comments and suggestions.
I Various commentators provide helpful overviews of the crisis and its institutional
and regulatory context. See generally Markus K. Brunnermeter, Deciphering the Liquidity and
Credit Crunch 2007-2008, 23J. ECON. PERSP. 77, 82-98 (2009) (providing an event logbook
of the 2007-2008 financial crisis and discussing the amplifying mechanisms that can turn
shocks into financial meltdowns); Gary Gorton, The Subprime Panic, 15 EUR. FIN. MGMT. 10,
12-37 (2009) (describing the intricate chain of risk distribution that lead to the financial
panic); Charles K. Whitehead, Reframing Financial Regulation, 90 B.U. L. REV. 1, 16-36
(2010) (tracing the evolution and regulation of financial markets and explaining how such
changes led to riskier behavior by financial intermediaries).

1209

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