Whilst it is bad enough that the banks have by and large been having one over us as customers for many many years with banking scandal after banking scandal and endless allegations of profiteering, the activities were questionable in terms of morality but they weren’t criminal actions.
However, with the Libor rate fixing and latest scandals involving multi-billion dollar money laundering schemes it begs the question of whether now we will see criminal convictions? Will we finally get tough on rogue banks/bankers?
SME directors get struck off and barred from being a director for all manners of non criminal things and whilst Nick Leeson brought down Barings bank with less than £1bn in losses and got six and a half years prison sentence as a result, the Standard Chartered Iran money laundering scandal is alleged to be around the $250bn mark. Add to this, the multi-billion dollar HSBC money laundering scandal last month involving Mexican drug cartels as well as the multi bank Libor fixing scandal, which is basically a multi billion dollar fraud in itself, and they all make the Barings downfall fall away into insignificance. Yet will any criminal prosecutions develop? Not blood likely.
The latest banking scandals are crimes, there is no two ways about it, so seeing as the global banking sector has failed to learn and change following previous fines and sanctions perhaps the only thing to save the industry from an eventual scandal so big as to bring it all down, is convictions for what amounts to criminal behaviour, and not just morally questionable business practices.
I seriously doubt any small business owner or manager reading this blog post will disagree with the thought that if we can convict benefit cheats for several thousand pounds of fraud and hand down jail time, why the hell is it that billion pound/dollar frauds and money laundering crimes go unpunished? Granted the investigations are only just underway but the lack of clarity from the Government that criminal convictions will arise (if the allegations are proved right) is worryingly familiar in terms of being another example of failure to act when it comes to banks being rotten.
When you consider that Madoff was given a 150 year jail term for a fraud estimated at between $12bn and $20bn can we not expect Standard Chartered execs (if found guilty) to get 1500-2000 years seeing the amounts involved make Madoffs scheme seem like pocket change?
And the latest argument from the banks? “If you paid for your bank accounts, it [libor / PPI scandals] wouldn’t of happened!” is just another example of them not accepting any accountability and continuing to blame the scandals on everyone but themselves. One has to wonder how many Downing St dinner`s have been paid for by the banking industry for this and previous governments` reluctance to act?