Barclays is expectng to be fined £500 million for rigging foreign exchange markets.
So, it's another day and another massive fine for a bank. Put it in context: this is twice the amount Tescos lost and no one bats an eyelid.
And that's now a problem. The banks are happy to be fined and the economy suffers because what this means is that banks have reduced capital as a result of the loss made and so banking regulation requires that they reduce their risky lending to entities like SMEs who need bank money to keep the economy moving.
The policy of fining does not work any more. Banks rake in some more cash from elsewhere to pay - much of that from QE spiked speculative trading - and the real economy suffers as bankers still walk free.
All three components of that equation are problematic, but the solution is in the last point. Bankers need to suffer personally for these frauds. Then regulation would have impact. Right now bankers still think they are beyond the law. That's what has to change.
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Since the entity ‘bank’ is prepared to aceept the imposition of a fine, is it not simpler and more effective just to revoke their banking license and disbar all the Directors.
They are beyond the law. Their extensive, some would say pervasive, investment in politics and politicians guarantees lax enforcement of already inadequate legislation.
To be blunt about it, looking at the quantity of politicians and noble lords in the financial crime empires, calling said empires corrupt may be complimentary!
Thanks Richard. The reluctance to do so for such a long time shows how much power the industry still commands. That needs to break and bars should help.
Hasn’t the SFO already achieved one convivtion against an individual banker and launched prosecutions over a dozen more over the LIBOR scandal? I don’t know enough about the case to know if that is the right number of prosecutions. Do you have any evidence of individual bankers who should be being prosecuted who are not?
What happens to the fines? Who do they go to? If to the government then surely that’s a good thing?
As far as I know there are no threatened prosecutions from this activity
No senior banker has been prosecuted that I know of
The fines go to the FCA but part are now diverted to charity – mainly for ex service people who should be assisted by taxpayers in my view
Richard
It seems there have been individual prosecutions and more planned.
http://www.express.co.uk/finance/city/521791/bankers-face-rate-rigging-Libor-punishment
As I say, maybe more should be but it’s clearly wrong to say none have been. The more you are wrong about things, the less people will listen when you are right!
That is the regulator
It is not a prosecution
No, It is a prosecution by the SFO.
If you read the story it makes clear that the Serious Fraud Office is mounting prosecutions and has asked the regulator to hold off its actions until the SFO has finished. One prosecution has already concluded.
Southwark Crown Court issued the following statement on 3rd October.
“A senior banker from a leading British bank pleaded guilty at Southwark Crown Court…to conspiracy to defraud in connection with manipulating Libor. This arises out of the Serious Fraud Office investigations into Libor fixing.”
The (unnamed for ‘legal reasons’) banker faces up to 10 years in prison.
11 further prosecutions are under way. Maybe not enough but it is plain and simple wrong to say no individual bankers are being prosecuted. It is disappointing that when someone points you in a direction that would enable you to correct an error, you do not seem willing to look.
OK
Accepted
The phrase ¨sacrificial lamb¨[s] springs to mind.
Business as usual after some sap receives a suspended.
The problem is that the ¨industry¨ is poorly regulated, and what regulation there is; is part of the problem.
The revolving door between regulator/regulated/legislators means that separating sheep from wolves is almost impossible.
I shall sit back and watch the show, nothing can surprise me anymore.
The next ten years in the pension show should be interesting (another industry deserving of intense scrutiny)…..