In Britain, though. Not the US. Britain’s Conservative prime minister David Cameron plans to introduce a bill in Parliament to penalize bankers for reckless and criminal behavior. Would Obama, the so-called liberal Democrat, ever push such a law? In your dreams.
According to the Daily Mail, a new law in the British parliament would send banking executives to prison for “financial malpractice.” The British paper reveals that that the legislation to be introduced by Cameron will most likely adopt all of the recommendations of The Parliamentary Commission on Banking Standards. These include a provision that banking executives be held personally accountable when a bank collapses and new powers for City (i.e. banking) regulators to cancel bosses’ pension rights, bonuses and pay-offs when their bank fails. The goal of the new law would be to protect British taxpayers from future bail-outs.
As in the US, the British banksters responsible for the 2008 economic crash walked away with massive pensions and bonuses, despite virtually destroying the banks they had run. The Commission also recommends establishing a new licensing regime to prevent another Libor scandal (in which bank managers colluded to artificially lower inter-bank interest rates). Under the new system bankers would have to abide by a new set of conduct rules or lose their license.
Sadly no UK bankers have gone to jail for their role in the 2008 economic collapse. Under current British law, senior bankers were able to evade punishment by claiming 1) that they were not personally responsible for their bank’s failure and 2) that they had not committed deliberate fraud. Presently the burden rests with financial authorities to prove wrongdoing. Under the new law, bank CEOs would be held individually accountable and would have to show they took “all reasonable steps” to avoid a failure.
The new law wouldn’t target bankers retrospectively. Fred Goodwin, who left Royal Bank of Scotland in ruins will still receive his pension of £342,000 a year for life. And former HBOS CEO will continue to get a £406,000 yearly pension.
photo credit: DonkeyHotey via photopin cc