Banking Scandalz

Do you know what popped into my head as I read the latest blog-post by Philip Boucher-Hayes ("PBH")?

Of course you do: it was the argument that is always made when the pay and conditions of teachers comes up on talk-radio

They are all underworked and overpaid because I know a teacher who just reads the paper all day/can't control the class/never corrects homework/comes in drunk etc etc

Fire those teachers, I say ! And then discuss what teachers worthy of employment should be paid.

So, up rocks PBH - I am out on a linguistic limb here; it means "PBH comes along", I think - to suggest that all bankers are evil because ... well, he has a list of credible accusations against a number of banks and bankers around the world. He and I had a little back-and-forth about this on Twitter, in which I wondered if any of the stories came to more than a hill of beans. He answered that many actually involved regulators extorting extracting large amounts of money in penalties from banks.

Parenthetically, I often marvel at the respect that court decisions or regulatory actions attract when the results line up with the zeitgeist. Out-of-touch judges and clueless regulators magically, when criticising popular targets and/or imposing penalties upon them, become not just excellent but infallible.

The catalogue of scandalous conduct laid out by PBH is impressive, so much so that in several cases it seems to me that it would merit the loss of banking licences. Why hasn't it ?

I am much too modest to suggest that I know the answer, but it seems to me that there several fairly plausible possibilities.

1. The conduct alleged never took place, or was less serious than alleged
2. It may have indeed taken place, but the proof is unavailable
3. Credible scapegoats were found and dismissed e.g. Bob Diamond of Barclays. (Note that they may or may not have been the true culprits)
4. It may still happen

"Wait", you say. "Are you not forgetting that many banks have already been fined huge amounts ? This proves that the allegations are no mere flights of fancy; they have in fact been proved beyond reasonable doubt, as you lawyers say".

Well, I am not familiar with all the cases involved, but of course it is not my intention to suggest that no bank ever grossly misbehaves. The manipulation of LIBOR, even if the effect on any customer, when there has been any at all, has been exaggerated, was appalling, for example. But I do not accept that all of these allegations have been proven beyond reasonable doubt, or even to the less demanding standard of proof viz. on the balance of probabilities.

Comments

[Arthur Doohan]

I'm pleased though not at all surprised that you have seen through the "LIBOR" pseudo scandal.

The whole thing (fining banks for individual malfeasances) has been an exercise in "pilot error" dissimulation.

The structure of banking is "borked", globally... But no one is allowed to address this issue...

"La Lotta continua"....