Something stinks !

Two of the world's biggest banks have just been hit with massive fines - and yet it is apparent to most people that something stinks in the world banking industry !  HSBC has been fined $ 1.9 billion for conniving with drug dealers to launder money and breaking the sanctions imposed on Iran by the world body.   UBS has been fined $ 1.7 billion for manipulating the LIBOR rate - the mechanism which controls the rate of interest charged within inter-bank commercial lending.

What is missing is a penalty for this criminality coming home to roost on the heads of those who actually run these banks.   The people who take home multi million dollar salaries and get obscene bonuses for the work they perform walk away whistling ' Dixie " !    They are not required to stand before a court, nor are they threatened with a prison sentence.    They retain their positions - and nothing really changes.

Of course, they claim that what happened was without their knowledge and shift the blame onto " rogue traders " further down the management line.   Even if this is true, they deserve dismissal for incompetence.   The head of such an organization has a duty to know exactly what is going on in the firm they head - and ignorance is no excuse.

These huge fines sound like they are delivering a suitable penalty - but they miss the mark.   They are a mere fraction of the profits these banks make and much of that profit has come from the criminal activity for which the fines are levied.   The banks will still post big dividends to their shareholders - and they would have been even bigger - but for these fines, so the real penalty is being sheeted home to the very people who had the least to do with this form of criminality.

With the same people heading the banks, where does remorse come into the equation ?    They are no doubt sorry - that they got caught.   Most probably the fines will not stop with the few already levied and more banks will be drawn into this web of deceit, but the regulatory authorities were also lax - and it seems that no heads have rolled there as a consequence either !

It sounds like an " I'll scratch your back and you scratch mine " type of situation.   Justice will not be served while the big guys at the top remain the top item on the totem pole.   This type of criminality needs appropriate consequences - and that means dismissal, corporate disgrace, a suitable gaol term - and a ban from holding any management position for a long period of years.

As things stand, a repeat scenario a few years down the track seems almost a certainty !