Crimes committed: why are no bankers in jail?

Crimes committed: why are no bankers in jail?

How nice of you: that gift you just made to charity. No one asked you if you wanted to make the gift. No one asked you which charities you’d want to support. But still. You made it. So thanks. Well done.

 If you’re confused – if, by chance, you don’t remember authorising anyone to pick your pocket to give to charity – then welcome to the world of financial services. Here’s how it works. Greedy, irresponsible morons on huge salaries and inflated bonuses take RBS, one of Britain’s leading banks, and trash it to the point of insolvency.

Because Gordon Brown’s government forgot the first rule of capitalism – that lousy firms should be left to go bankrupt – you rescued RBS using your money, your savings, your taxes. You, along with your fellow British taxpayers, now own 82% of the bank. In a small way, you’re a world-record holder: the bailout of RBS was the world’s costliest bank bailout. Congratulations on that. (Though again, I’m not sure you had a choice.)

Now, unfortunately, it turns out that those same overpaid, irresponsible morons ran an institution in which the manipulation of interest rates was endemic. Manipulation which made money for them, the bankers, at the cost of ordinary members of the public. It’s pretty obvious what ought to happen. The people who manipulated rates should go to jail. The people who supervised them should either go to jail (because they too were conspirators in the fraud) or they should be disbarred from business forever (because they’re too stupid for anything complicated.)

But needless to say, that’s not what happens in Cameron-land, any more than it did in Brownania. No, what happens is this. RBS is fined. It’s paid £87.5 million to the Financial Services Authority and has made all the right noises about learning its lessons. (Fat hope.)

Clueless Lord Turner should resign immediately!

Lord Turner should resign immediately giving his pension to taxpayers who bailed out RBS !

But the thing is, you own the bank. So that fine hits you. It doesn’t hit the idiots who managed the bank. It doesn’t hit the fraudsters directly responsible for the manipulation. Now although that’s hardly good news, it would be almost OK, as long the FSA simply returned the money to the Treasury, so that in effect you’d have been paying the fine directly into your own pocket. But that kind of common sense offends those in government. So instead the FSA passed the fine – the one which you paid – to charity. So you now have the rare privilege of (i) having shelled out for the costliest bank bailout in history with no chance of ever being repaid, and (ii) having given £87.5 million to charity. Well done.

But the figure that really counts? The figure that really counts is zero: the number of bankers in jail as a result of all this mess. Oh, and curiously enough, that number is identical with the number of brain cells registering electrical activity at the FSA. It’s enough to make one weep.

5 Responses to: The first rule of capitalism: bad firms like RBS should be left to go bankrupt and criminals should go to jail

  1. Malachi Brown says:

    Once upon a time, people DID go to jail for this sort of thing. And it didn’t matter how high up you were – even a peer of the realm in the UK could be sentenced to hefty jail time.

    At least someone – Elizabeth Warren – is asking the question in the US.
    Whether something will come of this is doubtful – I wonder just how long she’ll actually last – I can’t see any of her Senate colleagues having the same enthusiasm. Needs an Eliot Spitzer to have the guts to bring the prosecutions.

    • Mitch Feierstein says:

      MF Global? Hmmm. Its up to us and Planet Ponzi tells a story everyone needs to hear!

      • Malachi Brown says:

        Jail time for people like Lord Kylsant. Clarence Hatry sentenced to the maximum of 14 years penal servitude – no open prisons for white collar criminals in those days.

  2. terry shead says:

    The thing that gets to me the most no one is accountable no one gets a prison sentence and guess what we are paying freddie’s pension.

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