The root cause of financial frauds can be reduced to one single phenomenon. It is failure to Know Its Somebody – i.e. failure to Know Its Customer, or failure to Know Its Employee, or failure to Know Its Partner / Vendor. Bankers’ response to frauds 10.
We thought that our income would continue to grow strongly and that we would continually become more productive, but we systematically overestimated that trend. The problem was that in many European countries they then began building up debts based on that over-optimism. In that way you are cashing in on the optimism with the intention of paying back later.