We like justice, justice is good. Yet the sentences being handed out to the rioters do not sit right. Feel free to throw the book at them, though I don’t think putting people behind bar’s is enough of a punishment. No, the real problem with the sentences is that whatever the government says and thinks, whatever right wing commentators say, the rioters are being picked out and picked on.
Sure the rioters deserve the sentences given. But ask yourself this, why only five politicians have been prosecuted for fraudulently claiming for expenses (I can think of at least three former cabinet ministers who should have been charged for “flipping”)? More pertinent to the current news about Banking reforms is the question of why Goodwin and McKillop have not faced charges of criminal negligence over the take-over of ABN Amro.
To recap, the Royal Bank of Scotland won the race to buy the Dutch bank ABN Amro in 2007 to the acclaim of all sides, Salmond, McConnell and the prime minister in waiting Gordon Brown. Barclay’s has also shown an interest in the bank, but pulled out leaving the field clear for RBS. No one questioned the haste of the deal, or the speed that the deal was being rushed through… at least until it was “discovered” that ABN Amro was swimming in debt, having been exposed to US Sub-prime debt. You would have thought that Goodwin & McKillop would have had an inkling of the debt problem that the Dutch bank had. Maybe Barclay’s did? After all, there was no clear reason for them pulling stumps. Then again, Goodwin was somewhat engaged in what could be described as Ugandan affairs at the time.
Bankers and the events of 2007-8 have crept back into the news with the publication next week of the Vickers Report into the Banking Crisis, with the beginnings of a skirmish about when to implement its findings. Also there have been leaks from the memoirs of Alistair Darling “Back From The Brink: 1000 Days at Number 11”. In it Darling confirms that Brown wanted to sack him in the post Euro-Election reshuffle of 2009, he described Brown as “Brutal & volcanic”. He also confirmed that both he and Brown wanted to sack the governor of the Bank of England, Mervyn King, but couldn’t find a replacement. It is also alleged that Darling thought that "My worry was that they (the bankers) were so arrogant and stupid that they might bring us all down". So far, so rewriting of history. If they were worried about the bankers, why didn’t they take them on? After all Paul Myers did grant Goodwin his megabucks pension.
The Lib Dems promised to take them on at the last Election. As a result of the coalition talks we have The Vickers Report, which is rumoured to be proposing the separation of “casino” banking from normal high street banking. While we do not know what the report is going to propose, that has not stopped the debate into when the findings should be implemented. The CBI claimed that because of the slowdown in the economy, this makes it difficult to implement these findings at that point, with their Director General John Cridland saying “We're going to have a major problem if growth stagnates, and at that point, my businesses being able to get cash from their banks is critical. Anything which makes it harder for banks to keep the wheels of the economy well-oiled is not good timing."
This has prompted the Banks to also ask for the proposals to be deferred, with Angela Knight the former Tory MP for Erewash and current Chief Executive of the British Bankers Association saying that banks should be allowed to "finance the recovery first, pay back the taxpayer next and only then set about reform. If more regulation remains at the top of the list, then this will only have the affect of risking the recovery which is so essential to our future”. While this outlook will suit the Tories, who would rather like these proposals to be kicked into the long grass, the Lib Dems would rather like these proposals to be implemented as soon as possible. As has been pointed out on this blog before, the failure of Gordon Brown’s time in government was the regulatory malfunction that was started when we was at the treasury. The current government are not showing any signs of knowing how to re-constitute the regulatory frame-work.
Of the three crisis’s to envelop British life in recent years, the crisis that engulfed British banks and the finance sector came first. Yet while we see the list of charged rioters from August mount, we see no sign of any criminal investigation into the actions of the bankers. There has been no sign of a full inquiry into the regulatory failures and there has been no sign of our politicians from any side standing up to the bankers. In short, nothing has really changed since 2008. Ed Balls is even making speeches in the City promising a return to the days of light touch regulation. Sorry, not good enough. Tougher regulation is required, preferably as quickly as possible. After all, our politicians face being tarred with the brush of being soft on financial crime and soft on the causes of financial crime.