At least, it seems that one country is doing something about the criminal activities of bankers, even if the US is not.
Tiny little Iceland, with a population of about 325,000, which is no bigger than a medium sized US city, has just sentenced five bankers and one major investor to prison. This brings the total of bankers and investors sentenced to jail to 26 with a total of 74 years imprisonment.
Most of the bankers convicted have received sentences of between two and five years. Many people would think “not before time”.
Manipulated The System
After Iceland deregulated the financial sector in 2001, bankers “manipulated the system” as one commentator put it, which led to the collapse of the entire banking sector in 2008, along with the rest of the world in the global financial crisis.
For “manipulated the system” read “stole”. It is really very straightforward, and anyone with half a grain of common sense can see that.
Yet, what does the US and the rest of the world do? Fine the banks millions of pounds when they get caught. Do any of the criminals who cheated the financial system get sent to jail? No. They get bonuses, Seriously.
In the US, not one single banker was prosecuted, let alone even charged, for crimes related to the onslaught of the GFC.
Nine major world banks, including Goldman Sachs, Barclays, Royal Bank of Scotland, and HSBC among others, have agreed to pay a total of almost $2 billion in settlement of lawsuits brought by hedge funds, international companies, and pension funds in the US alone in relation to deliberate rigging of the Libor interest rate. This is before any fines imposed by regulators.
Scott & Scott, the lawyers acting on behalf of the claimants, are now moving on to tackle banks in the UK, which has a foreign exchange market twice the size of the US.
Who gets to pay all of the fines and claims? Not the criminals who instigated the crimes. The shareholders of the various banks concerned.
In the US, the government bailed out the banks in the sum of some $700 billion in 2008. Who paid for that? Remember that no government creates any money whatsoever. It takes it from the blood, sweat, and tears of its’ citizens who run businesses which produce wealth.
That is not to say that there is anything wrong with taxes when they are used for the benefit of all, but when they are used to prop up institutions which are run by individuals who have clearly broken the law, there is obviously something wrong.
At least, Iceland has acknowledged that.
When the Icelandic Premier, Olafur Ragnar Grimmson, was asked for his comments, he said: “We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the people, and didn’t introduce austerity measures like you’re seeing in Europe.”
Note: “We let the banks fail”.
And why ever not?