Bankers don’t go to jail because they are more equal than us all

European Parliament President Martin Schulz walks to chair a vote at the plenary of the legislative on the European Banking Union. 7th Parliamentary Term in Strasbourg. (EP Audiovisual Services).

How come and despite the fact that bankers systematically and quite openly cheat hundreds of millions of people, usurping trillions from them, and the only ones of that trade that have been locked up in a penitentiary are the bosses of the three Icelandic banks Glitnir, Kaupthing and Landsbanki, which went bankrupt in 2008? All the major US and European banks have been found guilty on various charges, the most important of which are misleading investors and knowingly causing the 2008-2010 credit crisis and still the bankers remain untouched.

On top of that, bankers have been caught in the act while rigging the interest rates benchmarks, falsifying the currency parities, fixing the derivative market pricing and faking the Baltic indexes of sea freight yardsticks. Yet no banker is in jail. The penal action against some second-rate deal room traders doesn’t change the hard fact the bankers enjoy full immunity vis-à-vis the western legal systems. Locking up one or two minor dealers is just a hypocritical act by the judicial authorities, meant to pacify public outrage. But then again why do bankers always manage to get away with dishonesty, fraudulence and misleading financial behaviour? Everybody knows the answer, ‘they are too big to be prosecuted’ because ‘they are too big to fail’.

Bankers are more equal

This however brings us back to George Orwell’s Animal Farm novel where ‘some animals are more equal than others’. Orwell wrote it having in mind the USSR but lately is becoming seasonable again. Can our western democracies tolerate that? Rather not. The cost can be as high as self-destruction. To the measure that the bankers’ immunity becomes progressively apparent to the average man in the street, citizens start voting for Nigel Farage’s UKIP, just to get revenge from the main stream parties, for tolerating if not encouraging the bankers’ catastrophic behaviour.

The same is true in France with Marine Le Pen’s Front National, in Italy with Beppe Grillo’s five star movement, in Greece with the Golden Down’s underworld fascists and elsewhere in Europe. Equally negative reactions against main stream politics, but expressing and stemming from different social and economic backgrounds, are the American Tea Parties which now shake the US political system, having overwhelmed the GOP. The traditional leadership of the American Republican Party, (the good old party) can no longer effectively manage its Congressional groups of senators and deputies.

Citizens against bankers

In the entire Western financial universe it becomes progressively clear that no country has taken any significant action, political, economic or legal in order to effectively place under control the unruly power of bankers. Iceland is the only bright exception, but this is a tiny country at the edges of the Western world. Last week an Icelandic court sentenced Sigurjon Arnason the former CEO of Landsbanki to 12 months in prison. Some months ago the former executives of Iceland’s two other big banks, Glitnir and Kaupthing had also been jailed. Hreidar Mar Sigurdsson former chief executive of Kaupthing, Iceland’s biggest bank, already serves a sentence of six years, the largest sentence ever delivered in Iceland for an economic crime. Geir Haarde the country’s prime minister up to 2008 was also found guilty of negligence which led to the crisis.

Practically all the major shareholders and the executives of the three Icelandic banks which went bankrupt in 2008 are now in jail. Those facts didn’t make it as prime news at the 8 o’clock bulletins of the major TV channel in Europe and the US. The reason is obviously that just after the news, usually follow the hideously expensive advertisements of financial services.

Reality cannot be ostracized

Nevertheless, this reality of self-imposed censorship in the major western media cannot forever hide the news that bankers in well-governed countries like Iceland go to jail. The combined effect of the bankers’ unholy activities, plus the political inaction against them and the cover up of the real financial issues by the major media, infuriates the average man in the street on both sides of the Atlantic Ocean.

On 13 November the European Sting wrote “…the Financial Stability Board, an international non-binding body based in Basel which comprises government and central bank officials from G20 countries had a bright idea for the lenders. They admitted that the 30 “too big to fail” major world banks should retain at least 20% of their risky assets in own capital in order to save taxpayers the onerous burden of bailing them out when needed”. Unfortunately, the Sting’s writer George Pepper concluded that, “In reality, the Board by recommending the retention of such massive bank reserves, indirectly recognises that for the time being and in the foreseeable future, taxpayers will continue to be held responsible or rather hostage, being obliged to bail out the ‘systemic’ banks when they go bankrupt”.

If the unemployed knew…

If the unemployed and the hard-working and heavily taxed ordinary men and women in Europe and the US become conscious of the real issues with the banks and the bankers, then the Tea Parties, the Farages, the Le Pens and the Grillos in Europe and the US may prevail. They are xenophobic, aggressive, dangerous and capable for the worst. And the worst may be a new global carnage.

The Russian autocrat Vladimir Putin and his ruling gang may contribute ‘positively’ to this monstrous prospect. The wars in the Middle East, North Africa and Eastern Europe may give us a good glimpse of what may follow. What is happening now in Ukraine can be the tracer used also to accustom us all to bloodshed.