Prem Sikka really is a weird one, isn’t he?

Bankers face no retribution in the UK. Iceland has sent 29 bankers to prison for their role in the 2007-08 banking crash. The UK’s overcrowded prisons could have squeezed in some bankers, but there have been no prosecutions for bringing down the industry and ushering in austerity. The UK finance industry has been a serial offender, as evidenced by mis-selling of pensions, endowment mortgages, payment protection insurance and rigging of interest rates, but successive governments have failed to prosecute.

Nobody’s doing nowt to jail the criminals!

It is not only regulators, prosecutors are missing too. In the US, Citicorp, JPMorgan, Barclays, the Royal Bank of Scotland and UBS have pleaded guilty to manipulating the foreign exchange rates, and traders have also been convicted of rigging a benchmark interest rate known as the London Interbank Offered Rate (Libor). In the UK, the Serious Fraud Office has recently lost six cases of alleged rigging of Libor.

Oh, we’ve just tried some possible criminals and found out that in fact they weren’t criminals after all.

22 thoughts on “Prem Sikka really is a weird one, isn’t he?”

  1. I disagree with you, the UK has a longstanding record of tolerating white collar crime. Just look at the abysmal record of the SFO and the UK court systems with dealing with complex fraud cases. This simply MUST change, everyone is more than happy to see a small number of benefits cheats punished and vilified on TV and in the press, but as soon as the perpetrator has a university degree, middle class or higher background and they work in the financial sector, they somehow become untouchable. Until this changes the City of London will continue to turn a blind eye to LIBOR, money laundering and many other criminal activities.

  2. the UK has a longstanding record of tolerating white collar crime.

    Just look at the abysmal record of the SFO and the UK court systems with dealing with complex fraud cases.

    You do know these are not the same thing? That complex cases, fraud or otherwise, are complex to prove to the appropriate legal standard is a feature not a bug.

    That the SFO are a bunch of numpties – well, I won’t argue with you there.

    But there are plenty of fraud prosecutions that succeed. Having been the lead investigator on a number of them.

  3. So Much For Subtlety

    Andy C – “Until this changes the City of London will continue to turn a blind eye to LIBOR, money laundering and many other criminal activities.”

    We need to be more like, say, Caracas which cracks down on White Collar crime all the time, don’t we? And if they don’t crack down on money laundering et al, why, the City will suffer as banks abandon it, right? The Financial industry must be suffering so badly because of this British tolerance.

  4. The real criminals are the politicians and their quangos especially the central bank. It is they whose market interventionism cause the 2008 financial crash and made bankers into opportunist thieves some of them at least.

    But then politicians are guilty of many more crimes against their citizens. Such as forceably extracting money from their citizens through tax (or to use it’s proper name, extortion) and then wastefully spending it. QE is legalised counterfeiting and there are so many other things that ordinary citizens would be imprisoned for that they are allowed to do with impunity. Just taking us into the EU they should all at least receive 40 years the same length of time the UK has been shackled to that democracy/freedom depriving monstrosity the EU.

  5. Antisthenes, I think you’ll find that it was hosing money at people who did not have the means to repay that caused the 2008 crash (cf Northern Rock and 120% mortgages). As well as Brown’s bonkers idea of removing the BoE’s regulatory powers and passing them onto a bunch of lawyers with zero knowledge of how banking actually works.

  6. Henry Crun: I think the BoE’s track record on supervision wasn’t entirely unblemished, featuring as it did Slater Walker, Johnson Matthey Bankers and BCCI. Doubtless what replaced the BoE was even worse.

    Among the plethora of ‘regulators’, the one I liked best (on account of its alternative name) was FIMBRA which came to stand for “Fuck It, My Broker’s Run Away”.

  7. as evidenced by mis-selling of pensions, endowment mortgages, payment protection insurance and rigging of interest rates,

    Only one of these, the last, would be a crime (fraud). The others, while civilly tortious (against the professional requirement to provide the best advice for the client) and therefore compensation may be due, are not criminal. I would also note that many people did very well out of their endowment mortgage life insurance policies – my parents, for example.

    I saw the way it was going, made the policies paid-up, and switched to a repayment mortgage. That people were getting other advice from their banks or financial advisers was only actionable where it was based on the commission rather than an assessment of the customer requirements (I over-contributed on my first DC corporate pension – subsequently to find out that 60% of my over-contributions went to the sales weasel who I had a 15 minute meeting with – it was _the_ corporate pension deal … IFA was a mate of the MD)

  8. The whole country seems to be desperate to load itself with massive debt just to own a square brick box, and when it goes tits up JAIL THE BANKERS!

  9. Aren’t our European friends’ banks in the shit because of dodgy loans to dodgy EU countries? You know, those rock solid investments advocated by the Left? Who goes to jail because of those?

  10. The UK’s overcrowded prisons could have squeezed in some bankers, but there have been no prosecutions for bringing down the industry and ushering in austerity.

    Funny that few thought spending the taxes these banks brought in during the good times was a problem, eh? “Austerity” would have been “normal levels of spending” without the finance industry swelling the state coffers.

  11. “Aren’t our European friends’ banks in the shit because of dodgy loans to dodgy EU countries? You know, those rock solid investments advocated by the Left? Who goes to jail because of those”

    When I read some of the books about the events leading up ro the finance collapse of 2008 in the US, one thing was a common theme; every time the US bankers needed a patsy to but the worst of the shitty CDO’s etc. they called up Deutsche Bank – and their rubes would buy it.

    All of this shite has been hidden by Deutsche, Credit Suisse, UBS etc for years… but it cant stay hidden for ever. Especially as Greece is going to default again, and Portugal, Italy even France may not be far behind.

  12. Apart from a select few individuals culpable at other banks, all that really needs to be done is for every current and living past partner at Goldman Sachs to be put against the wall and shot.

    They truly were at the root of a good deal of the more catastrophic of the financial evil in the last century. And it won’t be long before they give some business or government a right royal financial rogering this century.

  13. Prikka’s report on the Google PAC session on Left Foot Forward the other day surprised me that it went further than usual in containing a series of simple lie.

    Fine, it is on LFF so we expect made up fictions as routine, but the guy is either Pricker, Sicker, Dicker or just Thicker.

  14. The Bankers are Igor to the state’s Baron Frankenstein.

    No punishment of bankers without punishment of the political scum.

    Good luck with that.

  15. It would be a criminal offence to ‘lend recklessly’ to people who are risky investments.
    It would be a criminal offence to refuse to lend to small businesses or the poor who want to buy a house.

    I think Prem’s ideas might be something like the above.

  16. The whole country seems to be desperate to load itself with massive debt just to own a square brick box, and when it goes tits up JAIL THE BANKERS!

    Agreed. Jailing bankers doesn’t cure stupid in borrowers.

  17. Looking at the Iceland comparison:
    There’s certainly a tendency in the UK system to not jail “people like us”. Hence robbing a company’s warehouse of £100k’s worth of goods will probably attract 5 years. Robbing the companies books of £100k less. Robbing the company’s pension fund of £100m probably won’t even be a crime.
    I’m minded, the “people like us” operate the Icelandic system are possibly a little more connected with farming & fishing than accountancy & lawyering

  18. I think there are two very small things which probably crystallised and triggered the problems. Would be interested in comments from those here who know their stuff.

    1) Carter’s old 70’s law about Community Reinvestment Act or CRA. Taken by Clinton and ramped up so mortgage companies were forced to lend to v poor people who never paid back surprise surprise
    2) Brown allowing 100% ‘rehypothecation’ rates in London – borrowing against an investment even if it’s risky. No one else in the world allowed that.

    I’d be very interested if anyone can add some detail.

    Thanks
    Firefoxx

  19. @ Firefox
    IIRC Rehypothecation meant that if you had been handed a gilt-edged stock as security for a loan of an equity you could use that as security for borrowing an equity from a third party. Security for stock lending was (almost) invariably gilt-edged.
    So this didn’t involving borrowing against a risky investment.

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