Five years after the world’s financial system began melting down, consumers, homeowners and taxpayers - that is, pretty much anyone who isn’t a bank executive - remain frustrated that no banking bigwigs went to jail.
Bloomberg Editors write:
The reasons are many: Specific misdeeds couldn’t be pinned on higher-ups; prosecutors got cold feet after early fraud cases resulted in acquittals; what the person on the street considered 'fraud', such as giving triple-A ratings to bonds full of shoddy mortgages, was often legal.
The popular desire to put those in charge behind bars is understandable and unlikely to abate, given last week’s brief appearance in court of a former Citigroup and UBS AG trader accused of manipulating interest-rate benchmarks. At the same time, prosecutors are required to prove willful intent, beyond a reasonable doubt, to violate specific laws. Almost wrecking the world economy is a very bad thing. But it is not in and of itself illegal.
So what can be done when bankers, knowing they can’t be punished for what they don’t see, purposely don blindfolds ? Or when banks are caught breaking the rules but are allowed to pay large fines (which punishes shareholders, not executives) to settle civil fraud cases without admitting or denying guilt ?
Those are the questions the U.K.’s Parliamentary Commission on Banking Standards and the U.S. Securities and Exchange Commission sought to answer last week. Their answers flow from different legal, political and cultural conventions, yet they arrive at the same correct conclusion: When banks behave badly, someone must be held accountable. A personal price must be paid for institutional misconduct.
Hit the link below to access the complete Bloomberg article:
image: © banspy