Producer Managers: How Continued Focus on Banking Resulted in Absent Management

Abstract

When banks were small and simple, management was a secondary activity. In industry senior people stopped designing, making and selling cars and became specialist managers. In banking the local bank manager kept seeing customers and top management met with the largest clients or conducted takeovers and mergers. A senior Citi banker acknowledged that banking operations were not managed at all in 1970s. The lack of specialist management made absence of management of increasingly complex banks more likely. Incentives favoured banking over management. This producer manager approach contributed to absent management, bank failures and financial crises and made producer managers ill equipped to handle any of them.