Monday, January 12, 2009

The Bigger Banking Scandal


(Photo Credit Matt from London)
As we all know the press for the past 12 months have been full of the so-called Banking Crisis, or perhaps more accurately entitled the greed over common sense crisis. Anyway lots of words, pages and books by people eminently more qualified than me (albeit that as a UK tax payer I am supporting a lot of these institutions now!) to comment have been written. However a headline in the Financial Times caught my eye on Saturday "Lloyds in $350 million US Settlement", here's the link to the story http://www.ft.com/cms/s/0/a3905d28-dea6-11dd-9464-000077b07658.html. Whilst I can understand that greed took over the banking world and that led to the sub-prime debacle, what I find absolutely shocking about this story is that it was pre-mediated and very deliberate. I am sorry - I was under the impression that Banks were upholders of the law. Not only is the intial act shocking but it further compunded by being covered-up. Now once again the UK taxpayer is paying the price in the form of this massive fine. Lloyds says that it has increased its compliance but is silent on who or what was to blame for this and what action has been taken against individuals. It seems to me thatLloyds shareholders (I am not one) and the UK taxpayer are due an explanation and assurances that those complicit in this have been dealt with appropriately. Also it would be good to know just where the FSA and the Bank of England as regulators were when these crimes, and cover-up were being perpetrated. What seems to be clear is that the Banking sector, and by that I do mean all of the sector, is not only financially but also morally bankrupt. Its about time something was done! The regulators of banks need to wake up and get regulating not be asleep at their desks with cosy relationships with those they are supposed to be regulating. If necessary the Government needs to impose further regulation on the Banks and make them far more accountable.

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