Think about it, it’s late at night and you’re on a . A child like voice inside of you wants some ice cream, but you say no. Then, you open the refrigerator for some celery, and yet somehow find your hand reaching for the butter pecan Häagen-Dazs. This is a tiny, but real secret life. In a secret life, the mind simply segregates what we ought to do from what we actually do. This is as true for Joe or Sandra next door, and it is true for bankers as well.

For some, the allure of money is like the allure of that ice cream; it can push you into a secret life.

In the next few posts, we will look at how greed affects some of the most important people who have to deal with it. We will examine how greed can tip a competent professional into a destructive secret life. But, while examining these cases, just know that we all have issues with greed, just like any , whether it is food, or vanity. Let's look at what is wrong with our financial system, but remember, that bankers are people, just like you and me.

---------------------------------------------

The secret life of a banker isn’t important to us if they’re cheating on their wives or husbands, or if they’re cheating their diet, or even if they can’t give up a bad habit like or Internet . The secret life of a banker becomes important to us when they betray our trust and cheat us of our money.

With the Barclay Bank’s Libor scandal, Swiss tax havens, Madoff, Wasendorf, Stanford and other alleged scams, what’s clear is that financial professionals should not be trusted because they are only human. It is a , because, finance is a system that depends on trust, and a few rotten apples do ruin it for everyone else.

But what if the system generates rotten apples?

If trust leaves the markets, people will stop investing; so we need the markets to be fair. Yet, given all the graft and shaky news, it seems that wishful thinking is at work. We simply expect too much of the financial system. And they ask for too much trust from us. This is a toxic combination which tempts financial players to cheat, and doesn’t take into account the greatest variable: human nature.

The Easiest Person to Fool in Life is YOU:

Imagine that you’re on that umpteenth diet and someone puts a plateful of cookies in front of you. I won’t have any can quickly change to eating one or two; and we know where that goes. After all, who is going to know?

In the secret life of a banker or any finance professional, they’ll tell themselves

it’s not technically illegal, or

everyone else is doing it, or

just this one time, or

if I don’t do it, the firm could be in trouble, or

I am going to make a fortune on this, it’s worth the risk, and

Who is catching me anyway?

We have so much deceit at the very top. Fill in the blank: the Libor scandal, the Madoff’s thievery, Countrywide’s predatory loan practices, AIG’s obscenely profitable excesses and the apparently impartial rating agencies being paid by the very companies they rated. (How did mortgage backed securities get the vaunted AAA rating, and why didn’t anyone go to jail for this scam?)

The mind loves to trick itself, especially for a short-term profit. And, that secret life wins again.

How many of us can say we wouldn’t be guilty also? Would you or I have done any better if we could play a con, with little immediate consequence? And, how many of us are guilty on a much smaller scale. Greed influences; and sometimes in a malignant way.

Oh, yes, Bernie Madoff did go to jail, didn’t he? And Wasendorf apparently conned everyone for twenty years, but he’s in trouble too, no? Well, the secret life segregates and rationalizes. “Tomorrow, I’ll deal with it.” Or, “I’ve gone too far, so what’s the point of stopping now?” The mind rallies to game itself into the con. That is why these secret lives can go on for years.

Our politicians, CEOs and the people we trust have to make decisions that keep the rules intact, despite the many temptations. If the rules fall apart, we stop believing.

Yet, these men and women of finance are motivated by profit. They are not in the business of finance to find the next cure for cancer or find a teachable moment with a fifth grader. For many, this makes staying ethical exceptionally difficult and their secret life, a given.

Neil Barofsky is very familiar with our banking system, having been involved with policing the distribution of TARP money. If you remember, TARP was a taxpayer supported program (to the tune of 700 billion dollars)that was created to bail out many of our biggest banks after they made outrageous (and self serving) mistakes. In a recent New York Times interview Mr. Barofsky explains why he’s upset with the megabanks and their supporters. "Only with this appropriate and justified can we sow the seeds for the types of reform that will one day break our system free from the corrupting grasp of the megabanks."

Rage can be used for noble purposes, but what comes after the rage? Regulations may help, but changing banking psychology may help even more.

So, what happens when you surround a glutton with deliciously caloric foods? And, what happens when bankers get paid for short term or misbegotten gains, and can go home without looking back? Greed & The Secret Life wins again, and we (and the markets) lose.

Take a look at the rationalizations we've cited above. Do any of them apply to you? "Maybe, just this time?" A conscious mind sees greed as useful, but not in charge. But, an unconsious mind can be influenced to make big mistakes. Look carefully within. If it happens to bankers, it can happen to you or someone you love.

Conclusion: True often appears simple. In our next entry we’re going to be looking thousands of years back for a few words that are more relevant than ever.

---------------------------------------------------

The Intelligent Divorce book series, online course and newsletter is a step by step program to handling divorce and intimate relationships with sanity.

You can hear Dr. Banschick on The Intelligent radio show as well.