When is a banker ‘responsible’?
Fabulous incompetence. Amazing vulnerability. Sensational failure of supervisory systems. All have been on display amid the whirlwind crisis that has beset the Swiss Bank UBS since it discovered evidence of some rogue activity in its woodshed.
Those of us old enough to remember 1995 and the collapsed of the hallowed family bank, Barings, have seen it all before.
Even fresher in the mind is the exact original tactic as the UBS sting perpetrated at Frances’s Societe General by Jerome Kerviel. That one netted some $3bn.
It seems UBS started investigating the key “suspect” in July but failed immediately to spot fictitious positions that had been built to offset genuine losses.
And will we learn? Apparently not – the Financial Times repeats a quote from a Swiss newspaper interview with UBS’s boss Oswald Grubel. “If you ask me if I feel responsible, then I say no”.
He was heard to moderate his position by last night in a TV interview. Someone will almost certainly go to prison for this. But it won’t be Mr Grubel, and it almost certainly will not be the cascade of supervisory, and management operatives above the individual so far arrested.
Has anything been learned from the 2008 banking disaster – beyond the reality that it is the bulk of middle-income earners and the poor who pay for the consequences? If UBS survives, don’t bank on no bonuses being paid. Maybe I should have stopped that sentence at “don’t bank…” Because these days your money may be safer and slightly more valuable under the mattress…sorry some of you, futon!
Will yet more evidence of rot in the banking woodshed provoke a popular clamour for introduction of the Vickers Banking Reforms eight years earlier than the 2020 date so far mentioned? Don’t bank on it.
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There are 20 comments on this post
Yes the bankers again.Money, money, money Must be funny in a rich mans world .That about sums it up . What is fun to the bankers cost lives , homes and disrupts families , yet they get away with it.They cannot work alone though, they need investors , a type of customer and corrupters to go along with the deceit, to carry on hedging their bets so things will fall badly for those with an old fashioned idea of work hard , save and prosper in favour of the fast buck and we made a profit out of that aren’t we clever type.Bankers!
I think the question that should be asked is “Do we understand?”. ie, do we understand that “traders” are simply gambling on the stock market – using bespoke software designed to help them do so, and with access that gives them a head start against others who are playing in the same field, but with a less advantageous starting point? These gambles constitute much of the ‘financial services’ that used to be so loudly trumpeted as ‘wealth generation’, particularly by Gordon Brown and his ‘prudence’.
Hopefully, this increased understanding, that is offered to us when a trader’s gambles go so horribly wrong that they hit the headlines and force themselves into the wider public consciousness, will lead to a stronger political will to control banks’ activities and bonus culture in the financial centres around the world.
Maybe people should start looking at sensible alternatives. Credit Unions are ethical, don’t pay fatcat salaries and all profits are shared out between its members. Don’t be put off by the old-fashoned view of Credit Unions as “poor man’s banks” – an awful lot has changed meaning that you can get excellent service and tailored financial products. with more improvements always in the offing, maybe it’s time to take another look at Credit Unions?
Totally with you Claire – community banking is the way forward, just like switching your energy supply to an ethical provider like Ebico or Coop energy.
There is only ONE way to get the consumer / electorate message across that IT’S OUR MONEY and that it is to take it out of circulation through their grubby little hands.
Spot on, Jon.
Bankers can never be responsible – or so it currently seems.
Just as when it’s said that ‘we’re all in this together’, it doesn’t mean bankers.
Who is to blame?Obviously the bankers,from the top down ,in diminishing degrees.
Why? A culture appears to have grown whereby they treat the monies as their own to earn vast sums of money for themselves,not only by salary but unearned bonuses.
The banks contribute so much revenue to the treasury that governments are scared to act against them.Who reported Adoboli to the Police? Presumably some big wig banker who has taken huge bonuses on suspect financial deals and should be in the dock too.I seem to recollect the board of BT , the Board of News International are in the dock,so why preferential treatment for bankers?In current phraseology “they still do not get it!!)
Bankers should realise that it is not their money, it is ours the public.Their job is to safeguard that money,use it to benefit the country and make a profit on it.It is not theirs to gamble and take huge chunks of.
If they do not realise that ,there is only one answer,withdraw our money.Either reinvest it in some other form of saving.An ethical bank, a building society, a mutual society or as you say Jon under a mattress or if you are Japanese ,your futon.
They need to be taught a lesson
Jon,
For gawd’s sake…..”Has anything been learned from the 2008 banking disaster”?
Why stop there? Why have you – you, of all people – stopped thinking in genuine historical terms? I’d weep if I thought it would do any good.
Take this issue of separating retail banking from casino banking. The way it is dealt with – including by the otherwise admirable Faisal Islam – anybody would think it is a brand new concept.
But actually it was last dealt with head on by FDR in the 1930s Great Depression: his solution was the Glass-Steagall Act of 1933. It worked (after a fashion) for almost fifty years. Then along came the Reagan “presidency” (stop sniggering at the back there!) and its subsequent kleptocracy of everything, including rip off of the Savings and Loans Institutions. On this side of the pond we did the same thing with Building Societies and Mutuals.
Surely you know all this? Surely living and working in our corrupt, riot-torn capital of Mistake-on-Thames hasn’t addled your mind THAT much?
So ask yourself this: what is the logical conclusion to the behaviour of these suited up thieves? Do you REALLY think they’re going to say, “Yes, it’s a fair cop, guv”?
All Directors have a fiduciary responsibility to their customers and owners to keep the business in good order.
Bankers failed and made billions from us. They are either showing incompetence ‘off the scale’ or they are culpable in destroying their banks and our financial wellbeing. How many have been banned under the Companies Act from ever becoming directors again?
How did UBS directors not spot yet another outrageous risk taker?
A plumber, builder, electrician, engineer or any other worker that was so clearly useless would be out of a job and subject to liquidated damages at least. And I’m only guessing here but probably the taxpayer would not bail them out!
What’s so special about these bastards?
Go onto any Bank website and look at ‘The Board. The smug, grinning tossers that gaze out at you are giving all of us the proverbial corporate ‘finger’.
These bullies have designed their system to benefit themselves and self serving politicians do not have the balls to call their bluff.
Cameron and Co should treat them as you would any other bully; metaphorically hit them straight between the eyes.
Oops, there go another flock of pigs on their way to the bankers’ trough.
As you rightly observe, a plumber, builder, electrician, engineer or any other worker that was so clearly useless would be out of a job. Same would happen with an incompetent shop-assistant who continually under-charged customers.
The trader would seem to be no different – he was only an employee who did his job badly and his line management were also so bad that they didn’t see it, or want to see it.
Interesting then that, when the business employing an incompetent happens to be a bank, the full weight of the nation’s criminal justice system seems to be available to them as an ‘employee sanction’. He was immediately arrested and charged, rather than undergoing an internal disciplinary procedure.
Since when has our justice system become the de-facto internal disciplinary process of selected badly-managed businesses ?
You are correct, Mudplugger.
Industrial Tribunals come down like a ton of bricks on Employers who disregard Health and Safety legislation and Employment Law.
But bankers do not want to be regulated. They have persuaded (threatened!) politicians to give them a free hand. We need to change that regardless of the consequences. Call their bluff.
The biggest losers if the odd bank went bust would be the bankers themselves. The remainder would then be ‘encouraged’ to be prudent in case the same fate befell them.
Poor looters are jailed for stealing a few quid.
But incompetent, complacent, smug Bankers and Insurance Executives, who have been looting from us for years, are rewarded.
Where is our ‘White Knight’?
I said at the time that the Government should have let the Northern Rock be made an example of and not bail them out.
Concur wholeheartedly Jon. Until the governments stop living in the pockets with the banksters and force them fess up their true losses e.g. “mark to market” and also return to a capitalist system whereby failing businesses (eg banks) are allowed to fail, we shall continue to struggle through this financial mire. Another example of the banksters in action is this class action in the US alleging massive fraud by JP Morgan.
Action needs to be taken immediately, not in 2019!
Take note George Osbourne. You will not be in power in 2019 to be able action this, so make amends and do something now! Do not foist the problem off onto the shpulders of the next but one guy.
When is a banker responsible? NEVER
Wonder how many bank accoutns jon has given that he can only be gaureannted to get 83500 from ach account from the compensation schme;
What interwst is he getting given the current interest rates;
14 every quarter on a balanc eof 80000;
Future blogs should give clues about how extravagant he is with his spendiong; E.g how much does he spend on underwear; 3 quid per pair mnimum Not a pack of 3 for 3 quid from primark value.
The only reason I can think of why the current capitalist system is not being completely overhauled is that the people with power are the only ones benefitting from its obesity and corruption.
The myth that the wealthy must not be taxed more, must be given breaks that ordinary folk don’t get, and must be allowed to gamble with other people’s money and future because they create the wealth for the rest of us, has been blown out of the water.
If it were true, the gap between top earners and lowest earners would be reducing not increasing.
But still they are less accountable. Bankers’ and top earners’ pay continue to horrify decent people.
And even our MPs, who I recall being shocked when it was suggested some prisoners might be allowed out two weeks early, seem to have no objection when their former colleagues who screwed the taxpayer, are released after serving only a quarter of their sentence.
Will it take a revolution before they see sense?
If you want to be Wolfie, i’ll follow.
It isn’t the fact that MP’s are let out early,but that anyone is.What is the point of a sentence if only a quarter or half is served.At best good behaviour should allow days or a few weeks off a sentence.It is time that Jails became harsher and were infact schools and work places,used to educate and produce employable personel on release.
That’ll never happen.
The Tories want to privatise the prisons and the prison services. They have already started by giving Group 4 the contract for transportation and some prison guard services.
Labour want to send them all to a penal colony like Australia and forget about them, and the Limp Dems want to give all prisoners a hug and ask them not to do it again before letting them go.
‘Why have no bankers gone to jail?’ ‘When is a banker “responsible”?’
Damning account from across the Pond: ‘So the FBI warned in open testimony in the House of Representatives, in September 2004—we are now talking seven years ago—that there was an epidemic of mortgage fraud, their words, and they predicted that it would cause a financial crisis, crisis being their word, if it were not contained’.
Bankers, lawyers, accountants… and it’s all about property.
Going further:London’s swamped with billionaire property-owners according to a recent Telegraph piece, pushing prices into the stratosphere and our children out of homes. And this quote from the Treasury in response to an email sent them following the ‘Landlords from Hell’ programme: ‘You advocate the introduction of a land value tax. Your letter makes a number of interesting points. However [!], in the government’s view an LVT would be complex and costly to administer. In addition, and more importantly there would be a significant number of losers, with … asset rich cash poor groups…particularly hard hit. The government therefore has no intention of introducing a land value tax at this time’.