That’s an optimistic headline, obviously, as, to date, bankers have demonstrated that they are in fact above the law, and that they can do what they want — wrecking the global economy, for example, and being bailed out instead of being punished, as happened in 2008. However, in the wake of the inter-bank rate-rigging scandal that became public knowledge last week when Barclays were fined £290m in the US and the UK, the time may have come for there to be a reckoning — one which, appallingly, was avoided four years ago when the global crash happened that has poisoned our economic health ever since.

This time, perhaps, the odd high-profile scalp — Barclays CEO Bob Diamond, for example, who finally walked on Tuesday — and the promise of some sort of toothless inquiry may not be enough to quell the growing calls for the entire financial sector to be thoroughly overhauled and regulated, and for those who have committed crimes — in the many banks other than Barclays which are still being investigated — to be prosecuted.

Certainly, as Yves Smith explained on her Naked Capitalism blog, there are reasons to believe that this story has only begun in the US (where £230m of Barclays’ fine was imposed), because price fixing — of the type uncovered at Barclays, in which many other banks are also implicated — “is a criminal violation under the Sherman Antitrust Act.” As Smith noted, “The Department of Justice stressed that Barclays had been the first bank to cooperate with the investigation and had been extremely forthcoming, and for that reason it would not be prosecuted if it complied with the settlement terms for two years. The implication is that the DoJ will not be as generous with other banks involved in the price-fixing scheme.” Read the rest of this entry »

They say that patriotism is the last refuge
To which a scoundrel clings
Steal a little and they throw you in jail
Steal a lot and they make you king
Bob Dylan, “Sweetheart Like You” (1983)

The record-breaking fine of £290m to which Barclays was subjected this week for financial crimes committed from 2005 onwards sounds significant, until you realise that Barclays chief executive Bob Diamond was paid £17m for last year alone (and that the bank also paid £5.7m to cover his tax bill), that he has been paid almost £100m since 2006, and that the amount of the fine (£60m in the UK and £230m in the US) is basically peanuts — just 10 days’ worth of profit for Barclays, as Paul Lewis of Radio 4’s Money Box programme explained to the BBC.

The first thing that occurred to me was that, however much bankers are caught committing financial crimes, they always seem to get away with it, as Bob Dylan explained back in 1983. Moreover, Bob’s recognition of the disparity between the rich and the poor when it comes to crimes involving money also rings horribly true still, as is clear from the punishment for Barclays — a slipped wrist — and the punishment for those involved, however peripherally, in last August’s “riots” in the UK, when judges decided to “make an example” of the mostly unfortunate young people who came up before them. The most shocking example I came across was described in the Guardian as follows: Read the rest of this entry »