Taking the Floor: Models, Morals, and Management in a Wall Street Trading Room

by Daniel Beunza

An inside look at a Wall Street trading room and what this reveals about today’s financial system

Debates about financial reform have led to the recognition that a healthy financial system doesn’t depend solely on how it is structured―organizational culture matters as well. Based on extensive research in a Wall Street derivatives-trading room, Taking the Floor considers how the culture of financial organizations might change in order for them to remain healthy, even in times of crises. In particular, Daniel Beunza explores how the extensive use of financial models and trading technologies over the recent decades has exerted a far-ranging and troubling influence on Wall Street. How have models reshaped financial markets? How have models altered moral behavior in organizations?

Beunza takes readers behind the scenes in a bank unit that, within its firm, is widely perceived to be “a class act,” and he considers how this trading room unit might serve as a blueprint solution for the ills of Wall Street’s unsustainable culture. Beunza demonstrates that the integration of traders across desks reduces the danger of blind spots created by models. Warning against the risk of moral disengagement posed by the use of models, he also contends that such disengagement could be avoided by instituting moral norms and social relations.

Providing a unique perspective on a complex subject, Taking the Floor profiles what an effective, responsible trading room can and should look like.

Genres: Business

344 pages, Hardcover

Published September 3, 2019

Reviews

[Steven Rosenthal · Rating 5 out of 5]

If you do anything in the financial markets, Taking the Floor is a book you’ll find a really interesting read, but I found it a bit upsetting, too (in a good way). What I found great is how Beunza explains what a trading floor really looks like and what goes on behind the scenes. What I didn’t expect is him showing the scary side, too: that technology is taking over so much of what traders used to do, and that’s not necessarily always a good thing. The reason I liked the book and highly recommend it, is that Beunza doesn’t pull punches. He shows that today’s technological, not-so-perfect models can wreak havoc, especially when a crisis can be just around the corner. Great read, but don’t expect a fairytale; he tells it like it really is.

[Sam Billings · Rating 5 out of 5]

Interesting, well-researched, and presented in a solid forthright manner lending insights most readers have no idea exist within the realm of financial markets, most specifically the trading rooms. With the advent of, and ever increasing dependency on, models, Daniel Beunza presents solid evidence and a very strong case for reestablishing a moral footing within these institutions thereby protecting against future financial crises. Dr. Beunza offers a unique perspective on a complex topic. Recommended for anyone interested in markets, finance, and the sociology of finance.

[Angel Smith-Wren · Rating 5 out of 5]

The place for morality in the financial markets cannot be overstated. Without it we will go down the path oblivious to the dangers on the horizon if technology goes unchecked. The author of Taking The Floor does a remarkable job of showing trading room groups at work with and without moral oversight. Beunza’s decade-long research and conclusions give much food-for-thought so readers can clearly see what will happen – again – with another market crisis and no social integrity. I recommend this book.

[James Hundhausen · Rating 5 out of 5]

I can recommend this book to anyone interested in the markets, finance, sociology, morals and human behavior. Beunza's presented a well-articulated and justified presentation of a Wall Street trading room as the laboratory, and his conclusions are insightful and offer a warning for the future.

[Mike Dougherty · Rating 5 out of 5]

TAKING THE FLOOR is a very interesting and insightful look at the present day extensive use of financial models and trading technologies which have a far-reaching and troubling influence on Wall Street. Traders are often morally disengaged with the process of buying and selling, potentially leaving the whole system on the edge of a crisis. In his book, Beunza keeps the disaster of 2008 firmly and smartly in mind. I highly recommend it for investors, traders, financiers, educators, others. 5-Stars.

[Peter · Rating 5 out of 5]

A fantastic insight into the culture of investment banking over a long period from the Russian default and Asian crisis of 1998 to after the Global Financial Crisis. Through observing and interviewing individual actors, Dr Beunza is able to develop a much more nuanced view than the usual journalistic responses. He asks questions and proposes answers about the roles of models, risk management and managers. A really valuable contribution to the literature around organisational culture and of banks in particular.

[Jaume Sués Caula · Rating 2 out of 5]

Niche book for readers interested in behavioral economics.

(Maybe my review is biased because the book is not about what I expected).

It’s tesis describes how to introduce morality in the groupal behavior of market traders. I would expect more sharp conclusions with a better sustained data gathering methodology (in most part of the book, it is all based on a couple of interviews).

[Oracle Feathers · Rating 5 out of 5]

What I like about this book is the moral shift its existence indicates towards goodness. The awareness of an urgent need for change in the financial markets and a framework for that conversation is timely. This book is well written, well designed, and well considered. I strongly recommend it.