Don’t get too excited, it is only a little, but it is good news.
In a recent ruling by British regulators, the top executives and managers at banks operating there (which is practically all the major banks) could have their bonuses clawed back for up to ten years after any finding of misconduct. It will also prohibit bonuses for nonexecutive directors and for the managers of companies that are receiving financial support from the government.
The move, which is long, long overdue and still does not go far enough, extends a seven-year clawback period that one regulator, the Prudential Regulation Authority, (part of the Bank of England), introduced for so-called variable pay (read ‘bonuses’) last year as part of tougher accountability rules.
The new rules announced by the authority, which is part of the Bank of England, and by another regulator, the Financial Conduct Authority, are the latest effort by financial regulators in Europe to hold the banksters accountable for improper actions that could play a role in precipitating future financial upheavals.
The regulators say they are trying to “embed an accountable culture” in the City of London, which actually means that the authorities realize that the banksters have learned nothing from their previous catastrophic frauds and thefts. They know when the chance arrives these greedy and immoral people will try to do it all again.
The new British rules, which apply to banks, building societies and investment firms regulated by the Prudential Regulation Authority, including British units of United States banks and other financial firms based outside Europe, mean that senior managers, risk managers and others at banks will also be asked to defer more of their variable pay for a longer period, making it easier for regulators and financial institutions to recover bonuses if misconduct is uncovered.
Other countries in Europe are also enacting new regulations for their banksters. Dutch lawmakers, for example, capped bonuses this year for employees in the banking, insurance and other finance sectors that limits variable pay to 20 percent of their fixed salaries. The Dutch have also banned bonuses for executives at bailed-out banks.
European rules already limit bankers’ bonuses to the equivalent of their annual salaries, or to two times their base salaries if the company’s shareholders approve it. But they know they are so greedy that they will try to find ways round that.
Already some banks are making moves to get round the limits by introducing role-based remuneration and other payments, so the regulators have their work cut out for them keeping a step ahead of the thieves.
What they really need to do is confiscate ALL their ill-gotten gains, impose severe additional financial penalties AND throw these criminals in jail – for a long time.
America, which always likes to consider itself as the leader of the world, should lead in this regard too. It would be better than starting another war in some far off God forsaken country.
Unfortunately I think it will be an equally long time, and a lot more frauds, before they get to that much needed stage.
Last week several of the ‘BIG’ banks – you remember, the ones that are too big to let go bust – were fined in the region of $5.7 billion for illegal manipulation of the currency markets.
The usual suspects were included, J P Morgan, Citibank, Barclays and RBS all pleading guilty – but only after they were sure what the medicine they would be getting would be.
It’s a huge amount of money, there’s no denying that. And losing it will make the banksters hurt a bit. But only a bit.
And that’s the problem.
Yet again the United States government has failed to bring these criminals to justice after more of their deliberate fraud and theft.
In other words, they let them get away with it AGAIN!
Now, if I walk into a branch of, for example, Citibank and try to steal the money that their customers have deposited with them for safe-keeping, I would be videoed, photographed, and if I was lucky enough to get out of the premises, pursued by the police and even the FBI for as long as it took to capture me.
And I couldn’t have any complaints because that’s the way it should be. Thieves should be sought out, captured and after due process thrown into jail.
However, if I am a bankster, have good government contacts, and ply money and favors to those in government, then I am treated very differently.
I can embark on insider trading (which is essentially what the banksters were doing when they were illegally manipulating the currency markets), I can sell loans to people that clearly can’t afford them, then take their houses away or sell on their debt wrapped up in a ‘AAA’ bundle to my richer customers, and after all that steal even more of the money my customers have entrusted to me by awarding myself and my collaborators big bonuses that none of us have earned or are entitled to.
In this scenario am I pursued by the police and FBI?
Am I thrown in jail to be the bitch of Skull-cracker Jones or Scarface Smith?
Will I have to personally pay back the money I stole?
So what will happen to me if I am a bankster?
At worst I will get a slap on the wrist and told not to do it again. Even though recent history has proved that this is no deterrent and I will do it again at the first opportunity I get.
And, of course, I don’t have to personally pay the government’s fine no matter how big it may be. Instead my company has to cough up on my behalf.
Not that the company is much bothered either because when it runs out of money it goes back to the government which hands it back at least the value of the fine and usually much, much more.
It’s been a while since I did a Sunday Sermon. It’s an occasional, rather than a regular, feature here at the fasab blog. It just happens when I’m in the mood to have a bit of a rant about a subject that I consider to be serious.
If you have read much of my blog you will know that two of my favorite targets are the banksters and politicians. When they act alone they are dangerous, when they combine their forces they are lethal.
Today I’m taking aim at both of them.
Strap yourselves in, here we go….
In the wake of the financial catastrophe that the greedy banksters inflicted on the world there has been a lot of talk (but very little real action) about bringing these thieves under some kind of control.
Naturally the banks are fighting tooth and nail against any kind of financial reform and they have the contacts and the financial resources to do it.
They have, for example, dragged their heels at every opportunity, used our money (kindly donated by a stupid government) to lobby friendly and unprincipled politicians in Congress to repeal aspects of Dodd-Frank, sent armies of lawyers to frustrate regulators and make any new rules as weak as possible and threatened a plethora of legal challenges and lawsuits.
It has been a ‘David and Goliath’ battle but this time the richer and more powerful Goliath seems to be winning.
Unsurprisingly the banks’ biggest political allies in opposing the much needed financial reforms have been Democrats, such as the Robert E. Rubin wing of the Democratic Party, which has opposed moves to break up the big banks after the 2008 global crisis.
I say ‘unsurprisingly’ because the whole mess was caused by the Democrat regime of Bill Clinton who got rid of the Glass-Steagall separation of commercial and investment banking. Small wonder that they are railing against its reinstatement.
Unfortunately they aren’t alone. Most Republicans also oppose effective moves against the banksters. A fact less shocking when you realize that in the last two election cycles, over 60 percent of the bankster’s donations went to Republicans. It seems America’s form of democracy is still more about what the money-men want (and are willing to pay for), rather than what the ordinary people want.
Most disappointing of all, however, has been President Obama. He swept to power promising ‘change’ but he never backed meaningful reforms against the banks. On the contrary, the Obama Administration has repeatedly put forward nominees with Wall Street connections for major oversight roles. It’s a bit like appointing some of the inmates of a prison as the prison guards!
During the debate over the Dodd-Frank Act, Obama’s henchmen even lobbied against an amendment offered by two of his own Democratic senators (Sherrod Brown of Ohio and Ted Kaufman of Delaware) who wanted to cap the size of the banks.
The fact is, that if Obama had taken a stronger position on the much needed financial reform it would have been much stronger and much more effective.
Now they are neither strong nor effective. They won’t work, in other words. It’s just been a bit of window dressing and bluff for the benefit of gullible voters.
And now even more money will be paid to Republicans since they routed the Democrats and swept to power in the US Senate, as well as expanding their majority control in the House of Representatives. That means even less will be done against the banksters.
It is a simple equation. Money buys politicians, buys power and influence.
If you think you are a criminal mastermind it is usually a sure sign that you aren’t one. But stupid people are usually full of self-delusions – because of their stupidity.
And if you are a stupid thief, in your head you might have figured out that when you steal, for example, a TV from someone, the person most likely to need a replacement TV will be the person you stole it from.
Therefore, in stupid logic, what more cunning plan could you have than to break into a house, steal a lot of stuff and then sell it back to the victim of your crime. After all, you just know they need it.
In normal, sensible logic, however, the scenario is somewhat different. Because anyone sensible will know right from the start that the person you stole the goods from will immediately recognize their own possessions and more than likely call the police.
Which is exactly what happened in the case of three teenage morons who snatched a video-game system and then tried to sell it back to their victim.
It happened in Denver and, according to the police, a woman returned home to discover her home had been burglarized, with the thieves apparently gaining entry through a window.
Among the items missing were a portable gaming system and a jacket.
The woman immediately called the cops.
But the robbery had unnerved her somewhat, so rather than waiting at her place, she arranged for officers to meet her in the parking lot of a nearby restaurant.
While waiting there, three teenage males sauntered up to her and asked her if she wanted to buy – you’re probably way ahead of me – a portable gaming system, one that bore a remarkable resemblance to the one that had just been stolen from her place.
If that were not bad enough, one of the trio of teenage morons was wearing a jacket that looked a lot like hers.
As luck would have it, an off-duty cop was at a gas station next to the restaurant. He approached the trio of criminal masterminds and called for backup. Within moments they were placed into custody on suspicion of burglary.
You would hope that it would be a lesson to them but I think it’s safe to surmise that they are too stupid to learn.
They say rats squeal when they are being hunted and nearing capture and they’re right.
None more so at present than the rat banksters and nowhere more so than on Wall Street. If you listen carefully you can hear them squeal even above the noise of the New York traffic.
And the reason for the squealing?
Only that federal authorities are at long last closing in on some of the worst culprits whose greed and contempt for their clients caused the financial crisis we have all be suffering from during the past decade and more.
But before you start clapping the feds on the back, let me say it is too little and too late. None of the banksters are likely to face jail sentences which is what they deserve for their crimes against the people.
However, it is something and these days that’s about the best you can hope for.
In terms of the numbers, the banksters are facing fines of something in the region of $63 billion.
Wow, listen to them squeal!
It seems like a lot of money – and it is a lot of money, it could keep all of us blogging away happily for the rest of our lives and then some. But put in the context of what the banksters defrauded their clients out of and what they lost it is just a pittance.
Putting the figures into context, J P Morgan Chase’s $13 billion mortgage settlement in November was probably some kind of record, but they issued more than $460 billion in mortgage securities.
To illustrate it in numbers people can relate to better, that’s like a thief stealing a thousand dollars from you and getting away with it if he paid you back $28.
I bet the amount of the settlement doesn’t seem so big now. Nor is it commensurate with the size of the crime. But that’s what they’ll probably get away with. And they’re not even grateful for this small smack on the wrist, hence all the squealing.
Today started off as just another quiet Sunday. I was going to write a short sermon, but decided against it since you’d already had one of those from me on Wednesday.
Then I got a life changing opportunity from the most unlikely of sources. On offer was a cool $5 million!
How good is that!!
I just had to tell you about it.
The opportunity came from my good friend General Abdul Aziz Jassem al-Shallal, one of the generals who have defected from the Syrian Army.
It turns out that the office of General Abdul Aziz Jassem al-Shallal monitors and controls the affairs of sensitive institutions in Syria that takes to do with foreign contract payments.
It also turns out that General Abdul Aziz Jassem al-Shallal thinks that I am a respected and honest person suitable for handling this project/transaction with sincerity, trust and confidentiality. Perhaps he had read some of my posts about the folly of getting involved in the Syrian conflict.
Luckily – for him – before he defected, the General was able to get his hands on all the paperwork necessary to retrieve unclaimed deposits and over invoiced sums to do with foreign contracts.
And luckily – for me – he can arrange it so that it appears that all this unclaimed money is owed to me. All I have to do is agree to give him 70 percent of the proceeds, and for my trouble I can keep 25 percent, with the remainder going on expenses.
That’s a cool 25 percent of $20 million for me!
Have I ever been this lucky?
Well, no I haven’t. Never. Not once. And sadly I’m not lucky this time either.
You see I know that the General Abdul Aziz Jassem al-Shallal who emailed me isn’t the real one, this one only exists in the mind of a Nigerian crook.
I also know that this is the latest variation of the infamous Nigerian 419 scam, designed to con greedy and gullible people out of money, not give them the opportunity to make money.
And I know that if I was foolish enough to reply to General Abdul Aziz Jassem al-Shallal all that would happen is that eventually the fictitious money transfer would run into problems that would either require me to pay some cash upfront to clear the way for the transfer (known as Advance Fee Fraud) or hand over bank account or other personal details that would allow these criminals to try to steal my money.
So will I be taking advantage of this great life-changing opportunity?
The only reason I am mentioning this at all is to highlight the scam for those who maybe have not yet fallen victim to it, and as a warning to ignore all such “opportunities”. And there are a lot of them.
So why do scams like these keep happening?
Sadly the answer is, because a lot of the time they work, and they continue to work because people are so bloody stupid!
It has been estimated that there are a quarter of a million active scammers and that they cause $1.5 billion in losses each year, an average of $20,000 per victim. Some of the victims are just greedy idiots who think they are on to an illegal windfall, but others (also idiots) think they are contributing to things like charities and orphanages. On occasion some of these hapless victims have suffered more than financial losses, having been beaten, tortured, and even murdered.
There are two rules in life that you should apply to everything.
Rule # 1, believe none of what you hear and only half of what you see, and
Rule # 2, if it sounds too good to be true then it usually is.
No matter how great the temptation always try to remember these.