The FT – and many
other media following – report the record $ 56bn in fines for the banking
industry over 2014. To put it in perspective, the author mentions that this
amount is “the equivalent of the gross domestic product of Croatia”. That
sounds like a lot although Croatia makes up only 0.05% of the world population,
so maybe $56bn is not that much.
At the same time
fines are handed to a few big banks only – BNP was fined a substantial portion
of this amount on its own. Banks from India, China, Japan or smaller banks have
sofar hardly been fined, so does that mean that everything is in perfect shape?
In Malaysia earlier
in the year in his opening address to a financial crime conference we could
hear Roger Wilkins, the President of the FATF quote Machiavelli,
stating that nothing draws attention as a dead body in the town square at lunch
time…
Fines are handed (long) after the fact
and they focus the attention of decision makers in financial institutions on
money. Both aspects don’t help to prevent
financial crime, to change the culture in organisations or increase awareness
of staff and management alike.
Maybe more fines are unavoidable but the
industry would benefit from punishment in other than just monetary form – think
of community service for offending bankers - and other measures to prevent
finanical crime from recurring.
I wish everyone a good start of 2015.
Rolf
