SCOT-BUZZ Co-editor JOHN MCGURK says never mind all this stuff about bondage and erotica, it’s about time someone made a film about the banking world: Fifty Shades of Greed.
The revelation that HSBC helped the super-rich to dodge tax is the latest in a long line of banking scandals where the driving force has been a shocking desire for profit even if it meant breaking the law.
Here in the UK, we still await the prospect of a prosecution against those traders and bank chiefs who have clearly been up to their neck in it despite the paper and digital trails which can surely be unearthed to prove them guilty.
Why are we so afraid to punish those responsible – particularly when the scandals just keep on coming?
The biggest banking scandals in recent years have been resolved not by criminal investigations but by massive fines which, ironically in the case of RBS, are paid mostly by the taxpayer since we continue to own 82%.
In the last six years, it’s estimated that the total bill for fines against banks across the world has reached some $300 billion.
But the reality is that the fines haven’t worked – the cheating and the crookedness goes on and on.
Mis-selling payment protection insurance and interest rate swaps; colluding over the Libor inter-bank lending rate; rigging currency markets; money laundering; providing compromised investment advice and now tax evasion have all happened despite the 2008 banking crisis which brought the global economy to its knees.
HSBC, whose Swiss arm aggressively marketed ways to avoid tax and hid money for suspected criminals, is no stranger to scandal.
It was fined a record $.1.9 million in 2012 after it was caught cleaning up money on behalf of Mexican drug cartels and Iranian terrorists.
Tragically, following the actions of bankers, millions across the world have continued to suffer while those responsible have been shielded and have continued to prosper thanks to super-bonuses/ gold-plated pensions or both.
The argument for not prosecuting bankers is that you cannot criminalise someone for making a genuine business mistake or for being incompetent so it would be impossible to obtain convictions.
How can a judge and jury decide in hindsight what actions should have been taken to manage risk?
Besides, banging up bankers would discourage all legitimate financial risk-taking causing economies to falter.
But there has to be a difference between incompetence and deliberate fraud; documents surely exist to identify those who were touting assets they knew were junk or those who advised on the most effective ways for the very wealthy to avoid their tax bill.
It turns out that bankers actually believe they have to behave greedily.
Researchers at Zurich University conducted a very simple test designed to find out whether bankers are more likely to cheat.
They split their volunteers into two groups and got them to fill out a questionnaire: the first group was asked to answer questions about their work in finance and the second was asked about everyday life such as how much television they watched.
Having primed those taking part to think of themselves as bankers or ordinary individuals, both groups were then asked to flip a coin ten times when no one was looking. Each time they got heads they would win $20.
The results, secretly monitored, showed that more than 25% of those who were thinking of themselves as bankers cheated while those in the other group did not.
It appears that what is required is a generational shift in attitudes so that the ingrained culture of bankers can be changed.
Just like recovering alcoholics, bankers need to be made aware of how their decisions and behaviour impact on the rest of us…some hope.
Effectively decriminalising banking fraud has resulted in weakened public trust and has undermined government.
Perhaps the biggest mystery is why the actions of the bankers hasn’t caused significant social unrest.
The bail-out of Britain’s banks has cost £133 billion or £2000 per head for every person in the country.
We continue to be victims of massive sovereign debt with much more austerity and economic uncertainty to come following the general election.
Prosecutions would restore confidence in the banking system, help to reinforce Britain’s reputation as a safe place to conduct business and do much to heal the rift between the “untouchables” and the rest of us.
There is, perhaps, another alternative.
As bondage fever bizarrely sweeps the country, maybe bankers could suffer exposure to riding crops, cat-o’-nine-tails and … the Red Room of Pain!
John McGurk is co-editor of ScotBuzz and was editor of The Scotsman and Scotland on Sunday and managing editor of The Daily Telegraph.