J.C. Candor's Margin Call has been praised by critics for its portrayal of the moral and economic complexity surrounding the financial crisis of 2008. While Wall Street has been publicly demonized as a morally bankrupt institution, the film successfully analyzes the crisis as more than a mere story of good and evil.
One constant theme throughout the film is a lack of accountability. In place of morality, decisions were guided by complex financial models and most importantly by a constantly changing set of assumptions. It becomes abundantly clear that no proper controls were in place within or outside of the firm, and that perilous decisions were instead left to the discretion of executives such as John Tuld and Jared Cohen.
Prior to the slowdown in housing prices in 2007 and the ensuing crash in 2008, decisions at investment banks had been made according to largely the same set of unchanging assumptions. These included but were not limited to easy monetary policy, loose credit standards, steadily increasing housing prices, and constantly growing demand for complex fixed income instruments such as MBS and CDOs. Even renowned economists such as Alan Greenspan had declared a new age of American prosperity instead of recognizing that these conditions were likely to change at some point. This allowed executives such as John Tuld, played by Jeremy Irons, to irresponsibly leverage their banks to the point where any notable increase in volatility or change in assumptions would lead to disaster. The market collapse that ensued was the result of executives ignoring the risks that were inherent to the instruments that they were selling, and instead counting on their willing counterparties to be steady buyers.
Mike Ott
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