Do you think that some bankers are bad people? Morally reprehensible robots with black eyes, dark and void like their soul … if they have souls that is.
Ex-Barclays chief executive, Bob Diamond
If you agree with that description (made for dramatic effect) you probably think that some should face jail for their actions, and if you think that you’ll like the head of the new Financial Conduct Authority, Martin Wheatley, who has called for things like rate rigging to be a criminal offence.
Don’t get too excited. At the moment these offences don’t exist, so we’ve got limited options as to what can be done with these bankers.
One option is to fine the bank itself. But when Barclays is fined £290m and makes a profit of £5.88bn one can’t help but think the fining is futile.
Another option is to pressure banks to have their executives resign but if, as in the case of Bob Diamond, they resign with enough money to continue their life of luxury, fairness is hard to find.
Unfortunately, justice may look like revenge if it did come about. How do you prosecute individuals of a crisis that was so widespread? The simple answer is that you make scapegoats – but that’s not justice, that’s a show trial.
How do you prosecute morally reprehensible bankers who haven’t broken a law? Well, you enact a law retrospectively. But here’s the problem; how can someone have broken a law which didn’t exist at the time? They simply can’t.
Martin Wheatley has told us that “in the future we want individuals held to account”. He intentionally says “in the future” because the inconvenient truth is that the laws and regulations we had were insufficient to deal with such widespread corruption.
This means that bankers involved in the crisis probably shouldn’t face jail; there is no law in existence that can bring them to criminal trial.
The solution is to look forward: we need more laws and more regulations so that if similar events ever happen again, the FCA and the judiciary have the power to smite down these mighty overlords from their offices.