Margin Call (2011)

Directed by: JC Chandor | 110 minutes | thriller | Actors: Kevin Spacey, Paul Bettany, Jeremy Irons, Demi Moore, Zachary Quinto, Penn Badgley, Simon Baker, Mary McDonnell, Stanley Tucci

Now that the world has been in the grip of a credit crisis with all its consequences for almost three years, films and books on this theme are a warm addition to the even meager knowledge most people have about the ins and outs of banking. It is not yet easy to understand exactly how major insurance banks have led to the global crisis that we are only just recovering from. The film starts in a harsh tone: large parts of the workforce of a large investment bank are laid off. About an hour and a half later in the film we will see the girls who lead the victims to the slaughter like tame lambs, leaving the building with their stuff in boxes. This doesn’t bode well. On the evening after this turbulent day, young employee Peter Sullivan decides to work some overtime. His recently fired boss gave him a USB stick full of confidential information, which he had to be ‘careful’ with. What he discovers he can, no, he hardly dares to believe. He immediately drums up two colleagues to look at his shocking findings. What follows is a condensed lesson in business economics, not easy to follow but interesting nonetheless. What exactly is going on?

In short: where consumer banks lend large amounts of money (from mortgages, for example) to investment banks (investment banks) and invest through them on the stock exchange, the investment banks in turn package the financial products in complex packages to offer on the stock exchange. This is a very normal state of affairs. In the investment banking world – and so in film – these packages were sold for years, spread across many different products, spreading the admittedly significant risks sufficiently to keep this process moving.

In the film, we see how the risk management department tries to keep an eye on how much the bank’s traders and sellers are allowed to trade in order to avoid excessive losses. In short, a margin call is the moment at which the bell is sounded if the expected losses threaten to exceed the collateral to be compensated. Incidentally, this hardly appears in the film, where terms such as ‘volatility index’ are used rather haphazardly. The clever Sullivan accidentally discovers that the formulas on which these risk assessments were based are incorrectly constructed – with disastrous results. In one night, all the bigwigs of the bank are gathered together to hold emergency deliberations. The various managers and directors embody the possible sides of the financial world: one thoughtful and honest, the other cold-blooded and selfish.

The shocking message that nights like these could have sparked a global financial crisis is as shocking as it is unreal. On the one hand it is worth emphasizing how this can happen and what should be done differently in the future, on the other hand the tone of the film is too fragmented and too flashy to draw valid conclusions. Although the prevailing opinion is less and less tolerating the absurd wealth of the fast boys, the film nevertheless shows this side with a delighted look. The film’s unclear position culminates in the over-relativistic final speech by big boss Jeremy Irons, who tries to make a desperate Kevin Spacey (both strong roles) very clear that credit crises have ravaged the world for centuries without undergoing much structural change. That’s the way it is, and that’s the way it will continue to be, is his uninspiring message. Is this also what the makers want to tell the viewer? “It’s just part of it, the greed and cross-border risks are human”? That is difficult to handle, especially from a film that in turn has been seduced by the glamorous sides of the big bucks.