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Is banking full of psychopaths? An academic has been putting finance professionals through the psychopath test.

Are you psychopathic enough to work in banking?

Psychopaths in banking, apparently

The idea that the financial services industry is full of psychopaths who want to deprive fully-socialized individuals of their money is one that's been doing the rounds ever since the financial crisis. It may not be entirely true. In January 2014, the Financial Times found that only one in ten fund managers, at least, seemed to have serious psychopathic traits. This hasn't dissuaded Deborah Gregory, a finance lecturer and Jungian psychologist, from publishing a new book on the subject.

In 'Unmasking Financial Psychopaths,' Gregory expounds the notion that even if the people who work in financial services aren't psychopathic to begin with, the industry promulgates psychopathic values. People who start out quite nice and pleasant can demonstrate psychopathic traits once they're immersed in the world of banking.

The psychopath test for bankers 

Psychopathic traits in bankers are pretty similar to psychopathic traits in everyone else, says Gregory. Psychopathic financiers will:

  • Fail to conform to social norms with respect to lawful behaviors.
  • Be deceitful.
  • Be impulsive.
  • Be irritable and aggressive.
  • Display a reckless disregard for the safety of themselves and others.
  • Be consistently irresponsible.
  • Show a lack of remorse.
  • Be unusually charming.
  • Be disproportionately likely to take drugs.

Specifically, Gregory also says that financial psychopaths will:

  • "Use the tools of  his or her trade, computers and financial transactions, to purposefully damage others."
  • Engage in manipulative and deceitful behavior to lure clients into doing business, even when there are significant downsides ahead.
  • Go to flamboyant social events with the intention of proving what a big shot they are.

Who are the financial psychopaths?

Gregory's list of financial psychopaths includes many of the obvious suspects. She says Nick Leeson is almost certainly a psychopath, even though he appears to be living an innocuous existence in Ireland now. Bernie Madoff was one too. Raj Rajaratnam looks a lot like one, except that he didn't have an impulsive and undirected lifestyle. Jerome Kerviel, who has since atoned for his sins by walking across Europe smoking Gauloise cigarettes, is deemed to have some psychopathic symptoms (reckless disregard for others, unlawful behavior), but not to be fully psychopathic.

In the course of her research, Gregory unearthed some strange behaviors which, if not symptomatic of psychopathy, certainly suggest that bankers are willing to do almost anything to bring in a deal. "One sell-side trader I spoke to said he had taken a client skydiving to get his business. Another had gone diving with great white sharks in Australia because the buy-side trader was an avid scuba diver," she says.

What do you do if you think you have a financial psychopath on your team? "In the Arctic circle, the men of the village take the psychopathic person on a hunting expedition and push him off the ice floe and into freezing waters," observes Gregory. "Clearly this is not an acceptable way of dealing with psychopaths in the Anglo-american culture," she adds.

Related articles:

Compliance jobs in banks: High pressure, high reward

How to spot psychopaths, narcissists and Machiavellians, based upon behavior before bonus time

The best paying hedge funds in the UK

AUTHORSarah Butcher Global Editor

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