Knowledge Management

Bankers’ Rich Record of Nonlearning

The finance sector is especially rich in examples of experiential nonlearning, in particular in banking, where the record of failures has left a decent trail of evidence that successive generations of highly paid bankers continually forget. A graphic example, which illustrates both the magnitude of the phenomenon and its pervasive nature, can be seen in the banking crisis of the 1980s and 1990s. In the early 1980s the U.K. banking community was badly mauled by bad debts in South America. Less than 10 years later it was again overwhelmed—this time from loan defaults elsewhere in the developing world. Speaking in 1991, the head of one of the United Kingdom’s largest banks admitted that there were plenty of historical ...