Monthly Archives: August 2012

Empire Games

Many readers have been expecting me to post a follow-up to my Olympic analysis of four years ago. I was in fact expecting it myself and even started collecting data, but somehow it has not happened. Fortunately, regular contributor (and some time beer coaster calculator), James Glover has stepped into the void.

It’s at about this time every four years that the same old boring analysis of Olympic Medals [not for everyone! Ed.] is brought out showing Olympic medals per capita, per GDP, per dollar spent etc. While this is all very useful, this particular Olympics it has failed to show Australia “punching above its weight” and is thus, in reality, the dominant sporting nation not just on the planet, but in the whole of history as well. The Fairfax press has tried to prove this thesis, but there is a spoiler. However you cut it we came out of the top half dozen nations. Personally I don’t think coming 10th in the gold medal count is really that bad. At least we beat the Kiwis right? Hmmm, that gets me thinking…

Actually it also occurs to me that were we just to reach out across the Ditch and extend a filial hand to our beloved New Zealand cousins, combined our trans-Tasman teams and competed under an ANZAC flag we would have finished an even more respectable 5th just behind Russia.

So this got me thinking. How would other groups of nations, alliances or indeed, past empires, have fared in the Games of the XXXth Olympiad? I can’t guarantee my geography is precise (and it is not up for discussion) but here is my best take on it. For these purposes I have not included the US in the British Empire because frankly it was their choice to leave without seeking permission.

In the interests of fairness I have allocated only part of the tally in some cases to take into account that (i) the Romans did not conquer Scotland or Ireland (so 50% of Team GB), and (ii) Quebec is not part of the Anglosphere (so they only get 75% of Canada’s tally – this on advice of a non-Quebecois Canadian). Feel free to continue this game – Axis vs Allies, the French Empire of Bonaparte vs British Empire at the same time. Endless fun now our cold winter days are no longer warmed by the Olympic flame. Interesting to see that in terms of Empires the British come behind the Mongolian Empire and the Roman Empire wins on weighted medals (3,2,1) if not on gold medals alone.

In any event the result proves the strongest alliance of all time is NATO – both the strongest military alliance and, if they wished, the strongest sporting one. Maybe money doesn’t buy you medals but it would seem that missiles do!

Empire/Alliance Gold Silver Bronze Total Weighted % Total
NATO 138 129 139 406 811 45%
EU 95 96 103  294 580  32%
Anglosphere 98 73.75 79 249.5 520 29%
Roman Empire 68 79  72.5 219.5 435 24%
Mongolian Empire 75 54 64 193 397 22%
British Empire 58 58 71 186 361  20%
Soviet Union 45 41 67 153 284 16%
ANZAC 14 18 17 48 95 5.3%


HandshakeDuring the week I attended a farewell function for a retiring colleague. The turnout was impressive, a sign of deep respect earned over a career at the bank spanning more than forty years. In the speeches, a recurring theme was trust.

The primary business of a bank is lending money, which exposes the bank to credit risk, the risk that a borrower will be unable to repay the loan. On more than one occasion, our retiring colleague had turned down a loan based on prior bad experiences with the prospective borrower. Why would you lend money to someone who has lied in the past? Learning from past betrayals of trust proved time and again to be a wise risk management strategy.

In Trust: The Social Virtues and The Creation of Prosperity, Francis Fukuyama argues that trust has played a crucial role in the development of capitalism. While some point to the role of the rule of law for enforcing contracts in enabling business, Fukuyama emphasises that legal recourse only serves as a last resort. More important is the simple confidence of a handshake: the confidence that those you do business with will live up to their end of the bargain. Those societies which developed mechanisms for extending trust beyond small networks of families and friends were rewarded with greater economic success.

If trust is important for business, it is particularly so for banking. But, scanning the financial headlines over the last few months shows a banking system apparently intent on destroying society’s trust in banks and bankers.

Serious Fraud Office investigating the rigging of LIBOR rates

Barclays is just the first bank to be fined for allowing traders to manipulate the LIBOR interest rate benchmark. The scandal cost chief executive Bob Diamond his job and this story will be back in the headlines as the findings extend to other banks and civil cases unfold.

HSBC accused of providing a conduit for “drug kingpins and rogue nations” 

Before a US Senate hearing, HSBC’s head of compliance faced charges that the bank had acted as knowing banker to Mexican drug cartels. He acknowledged that “there have been some significant areas of failure” and resigned his position there and then.

Standard Chartered alleged to have “schemed” with Iran to launder money

The BBC article in the link above is coy in its language. The New York Department of Financial Services is a little less so. Page 5 of their report quotes a Standard Chartered executive as saying, “You f—ing Americans. Who are you to tell us, the rest of the world, that we‟re not going to deal with Iranians?”

The front page of the Economist epitomises where this has led.


The worldwide reputation of bankers is at its lowest point, in my lifetime at least. The result will be new and more stringent regulation and more intrusive oversight of banks by regulators. This outcome will be well-deserved as banks have proved themselves unworthy of the trust of their communities. However, it is also likely to keep borrowing costs and transaction fees high as banks struggle to deliver shareholder returns while covering the costs of new regulatory requirements. So, it will not just be banks bearing the cost of their misdeeds.

Trust is hard to earn and, once lost, harder to recover. Every bank around the world should be thinking very hard right now about how to restore trust in banks.