Wednesday, June 19, 2013

Jailing the bankers

Since the LIBOR scandal, the UK's Parliamentary Commission on Banking Standards has been grappling with how to make bankers behave responsibly and not destroy the economy with their scams. Their solution? Jail the fuckers:

Senior bankers guilty of reckless misconduct should be jailed, a long-awaited report on banking commissioned by the government has recommended.


"Too many bankers, especially at the most senior levels, have operated in an environment with insufficient personal responsibility," the report says.

"Senior executives were aware that they would not be punished for what they could not see and promptly donned the blindfolds.

"Where they could not claim ignorance, they fell back on the claim that everyone was party to a decision, so that no individual could be held squarely to blame - the Murder on the Orient Express defence."

So instead they're going to have clear statutory responsibilities with criminal penalties for recklessly ignoring them - a form of economic "command responsibility".

(Meanwhile, back here in New Zealand, our own regulator, the Financial Markets Authority, is trying to move in the opposite direction, calling for an end to a "culture of blame" when financial scammers and con-artists rip us off. Wouldn't it be nice to have a regulator who wasn't a total captive of the industry they supposedly regulate?)

The question now is whether these good proposals to make the wielders of economic WMD responsible for their use makes it through the UK Parliament, or whether it is watered down by the City lobbying machine. Sadly, given how dependent all the UK's major parties are on the bankers, my money is on the latter.