But not a single banker has been arrested for trashing the economy.
They could be. There is a criminal offence of “fraudulent trading” contrary to s993 Companies Act 2006. This occurs where a person (usually a director) is “knowingly party” to the business of a company being carried on “with intent to defraud creditors” or “for any fraudulent purpose”. Fraudulent trading necessarily involves dishonesty. The maximum penalty for fraudulent trading is 10 years imprisonment.
Our main banks were, we now know, known to be insolvent in 2008. Their auditors had to seek government assurance that there would be a bail out to ensure they could sign off the accounts as going concerns. They have admitted this in the House of Lords.
And the government promise of a bailout meant that they were not insolvent, doesn\’t it?
Before that assurance was given the banks had the liabilities about which the auditors sought assurance. They were therefore trading during that period knowing they could not meet their obligations. That resulted in their creditors being defrauded – we paid the bill as a country and the government was undoubtedly a creditor at the time. The government could rightly bring the charge against the directors involved, in my opinion.
But they have chosen not to do so. Why?
Because the crime is knowingly trading while insolvent. And as we know, the banks actually thought they were doing just fine. Up until the day they realised they weren\’t.
Stupidity, ignorance and or error are not crimes.