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Policing in good times and bad

If only there was some way of changing undesirable behavior in people. Some way of stopping people committing fraud, Libor manipulation, ‘mis-selling’, corruption or the laundering of drug money. In short some way of changing the damaging behavior of the bankers. Does such a thing exist? How could we prevent another 2008? The solution is actually relatively simple, wouldn’t cost much, is a tried and tested means of curtailing the worst excesses of human behavior and already exists. The criminal law, and the sanctions that can be imposed for breaches, seems perfectly adequate when discussing murder, theft or rioting. It would also be perfectly adequate in changing the bankers. If it had been clear to the boards of the banks that Libor manipulation would result in a prison sentence then I suggest it wouldn’t have happened. The same applies to all the scandals that have been uncovered. The reason we haven’t seen a mass of bankers jailed is simply because the law, as it stands, doesn’t define as criminal much of what has occurred or if it does there has been a lack of backbone from government to enforce the law. What is required to avoid a repetition of events is a criminal framework, not a regulatory one, that defines unacceptable banking practices and is enforced by effective punishment. A risk of swapping pent houses for Pentonville may be the best way to change the bankers.

10-Sep-2012

9:44 am