Should Reckless Bankers Face Imprisonment?
On 19 June 2013, a long awaited report, commissioned by George Osbourne, which was conducted to investigate the criminal liability of bankers who have acted recklessly, was released. The verdict is that in the future, bankers will be held accountable for their actions. Previously, there was no personal liability for bankers even when gambling with millions of pounds worth of tax payers’ money. This period of time has come to an end. But should bankers be responsible, is it fair that they will be punished for doing their jobs?
Until now, bankers have put the interests of wealthy shareholders ahead of national financial security. They stood to gain an incredible amount of money if they did well, but stood to lose nothing if they acted irresponsibly. And this is arguably one of the reasons that the country’s finances are in such a chaotic state now. But perhaps it was not these individuals who were responsible themselves, much like the large companies exploiting the tax system, or the MP’s expenses scandal, perhaps it is the system at fault rather than the individuals using it.
If the potential bankers graduating from university are expecting to go into an industry where huge bonuses are part of the deal, then money is established as a huge motivator from day one. The industry may be attracting the wrong people, or at least people with the wrong motivations because of the way in which it is structured. The recruited bankers have the interests of themselves or their money-grabbing shareholders at heart, rather than the security of the economy.
But this doesn’t mean that the individual has no responsibility whatsoever. I haven’t heard of a case where a banker has refused a bonus because he thought he didn’t do a good job. Some bankers have definitely taken advantage of their positions and the resources at their disposal.
As with anything, there is a spectrum of recklessness of the actions taken by bankers. A one-size-fits-all punishment will not work here. So the report states that trials must take place to establish the liability of individuals. Each case will be treated separately. The suggested punishments range from having to pay back their bonuses to serving a prison sentence.
But this is only suggested for extreme cases, where the reckless acts of an individual or group of individuals have a detrimental knock-on effect on our economy; and by extension, the well being of the nation, then those bankers should be punished with criminal sanctions, not rewarded with millions of pounds in bonuses when they have lost the country money and financial security.
What is really important is that the system is set to change. It has been recommended that bonuses are held for 10 years before being paid out, to ensure that the individual really deserves it before it is paid. This is just one of the proposed changes which is set to improve the banking system for good, and to hopefully prevent another crisis from happening in the future.