- Category: Editor's blog
- Created: Thursday, 28 June 2012 07:38
- Last Updated: Saturday, 30 June 2012 11:11
- Published: Thursday, 28 June 2012 07:38
- Written by Colin Sumner
Todays newspapers carry the story of the £290 million in fines levied against Barclays Bank by UK and US authorities. Sounds a big fine, but you really need to understand what they did, and then let it sink in....for it goes to the heart of a very big question: what is a crime and why do working-class crimes get such harsh penalties like prison sentences when elite worngdoings don't even get censured as crimes.
It seems Barclays' traders, and those from other big banks, routinely lied about the interbank lending rates which determine LIBOR, the general rate that lending institutions like retail banks and building societies use to fix their interest rates when they lend out mortgages, personal loans etc. or conspired with others. Why does this matter? Because apparently LIBOR is based on a rough survey of the interest rates the big banks use to lend to each otther, which is a joke for a start - we let the big banks dictate the base interest rate? It also matters because those lies then benefitted those traders in their highly leveraged massive derivative trades where a fraction of a percentage point makes banks millions. See also Robert Peston's comments on the BBC News site:
So, yes, you got it, if I've represented matters more or less correctly, some of those bankers' bonuses, which, after all, often reward the derivative traders most, were based on manipulation of the market, or obtaining money by false pretences, or by criminal deception, or, in common parlance, fraud. That is perhaps the best reason why Barclays boss, Bob Diamond, has given his bonus back.
Now, we have had a lot of discussion on CrimeTalk recently about avoiding pre-emptive labelling of ordinary troubled youths who misbehave, but we might now want to consider the opposite issue: why don't we punish the serious crimes more severely? None of these lying traders or fraudsters will be sent to prison.
So, let's get this right, if you form a gang and rob a bank, taking nowhere near as much as lying traders did for Barclays, you could get 20 years in prison, but if you conspire to manipulate LIBOR by lying about interest rates to make huge profits running into hundreds of millions your boss takes the rap, your company is heavily fined and you only lose your job?
OK, perhaps this is the right way of doing things....a kind of restorative justice: we avoid clogging up the prisons with rich white people at the taxpayers' expense and and take some of the ill-gotten gains into our national treasury.....? But then we give it back to the banks next week through quantitative easing, so not really....
Tony Robinson, from Blackadder and the Time team summed it up very well indeed on BBC's Question Time:
Even the Labour Party, that neo-Thatcherite party of the working class, does not quite grasp the depth of the issue here, and many criminologists don't either. These kinds of major elite wrongdoing are simply not part of the crime-ing process, not seen as crimes, they are hived off into another game altogether. Indeed, it could be reasonably argued that Labour actually sees little difference between crime and business. Only this week, Labour's Shadow Business Secretary said that if inner-city gangs applied their entrepreneurial zeal to legal business they would become rich men - he didn't actually say 'get rich quick' but you know what he means. Well, he's right in a way, because today's Barclays story illustrates how top financial institutions regularly use criminal methods [the criminal deception had been going on for years, and across the banking system].
As Kevin Maguire says in that opinion piece above from The Mirror:
"THERE is no more nauseating sight in British politics than a Prime Minister born with a silver dinner service in his mouth hypocritically declaring war on a supposed culture of entitlement.
Here is a toff married to an heiress, a gentleman raised in a country house with a tennis court and swimming pool in the garden, nanny on permanent call, who was educated in a prep school favoured by royalty before Eton then Hooray Henrying with the Buller Club in Oxford, going on to secure his first job after a word was put in from Buck House, the second after mummy-in-law had a chat with her wealthy chum, daring to claim some people have it easy.
Chairman Dave with his Little Blue Book lecturing low income families, Chinese-style, on how many kids they can have is the political eugenics of a desperate leader.
Cameron, the Prince of Privilege, has no idea how ordinary people live and doesn’t care two hoots.
That upwards of 10 people are on benefits for every vacancy or most families on housing benefit are the working poor, employed but earning too little to afford Rachman rents, is conveniently ignored by a PM who blames the penniless for their hardship instead of the curses of low wages and unemployment.
Bashing the unfortunate on benefits is scapegoat tactics of a classic divide-and-ruler, turning the low income households against those even worse off.
Destroying the welfare state is one thrust in a wider attack to create a country of drones to toil cut-price in the interests of fatcats who bankroll the Tories.........."