# Why no one is going to jail for the banking crisis



## Brendan Burgess

Fergus O’Rourke has an interesting, although long-winded, series of  five(and counting) articles on his excellent blog “Why they should not be arrested”  As I agree with his general point, I have encouraged him to write a shorter snappier piece and publish it to counter the general view that “someone should go to jail for the mess that we are in”. He suggested that I publish it myself, so here goes… These are my views and not intended to be a summary of his.

 A good example of an informed commentator making the call to jail the bankers was  in last week’s Sunday Business Post.  Dr Joe McGrath of NUI Galway had an excellent article [broken link removed] He sets out the criteria used by judges for imposing prison sentences and questions whether these are appropriate for white collar crime. But he finishes his article with the following 



> The deprivation of liberty through imprisonment is the strongest available punishment in the Irish legal system, and it should be used to punish only the most serious crimes. However, in light of the banking crisis in 2008, there can be no doubt that corporate and white collar crimes are serious wrongs that threaten the economic security of the state.


*There is simply no evidence whatsoever of crimes having contributed to the banking crisis in Ireland. * 

 People are prosecuted for crimes – drunken driving, assault, rape, robbery, fraud, tax evasion, pushing drugs etc.

Where the judge deems it serious enough, they are sent to jail.  

Errors of judgment, greed, stupidity, arrogance and incompetence are not crimes.

Carelessness and recklessness are not usually crimes unless specifically deemed as such by legislation e.g. reckless driving causing death. 

Breaches of the Companies Act or the Central Bank regulations usually result in fines and disqualifications, but rarely jail sentences.

It was greed, stupidity, arrogance, incompetence and recklessness which caused the banking crisis. It wasn’t fraud or dishonesty. 

Bankers the world over got caught up in reckless lending. There were only a few exceptions.
Consumers the world over borrowed recklessly. There were many exceptions. 
Regulators the world over failed to regulate them properly. There were only a few exceptions. 
Politicians the world over failed to intervene. There were only a few exceptions. 

 The Irish people are paying a heavy price for the collapse of the banking system. But this is due to the greed, stupidity, incompetence and recklessness of many people. I have seen no evidence that fraud or dishonesty paid any significant part in it. 

It’s possible that some of our top bankers have been involved in fraud or theft. It has been alleged that some loans were made non-recourse when it was known that the banks were in trouble. Some other allegations have been made and are the subject of Garda investigations. But these were not the cause of the banking failure. If bankers or anyone else were involved in fraud, they should be prosecuted. If the fraud was serious, then the judge will decide whether a jail sentence is warranted. 

Take Michael Fingleton for example. Some years ago, I put down a motion of no confidence in him as Chief Executive of the Irish Nationwide. I did not consider him a fit person to run a financial institution. With the additional information we have now, I think he can be fairly described as greedy, stupid, incompetent and reckless. However, his board and the Financial Regulator knew what he was doing and didn’t stop him. But I have seen absolutely no evidence that he has committed a crime – small or large. 

The Anglo lending spree was fully supported by its board. The Financial Regulator was fully aware of it. It was stupid, incompetent and reckless, but it was not criminal. 
Seán Fitzpatrick borrowed money from Anglo. This was foolish but not illegal. Hiding the loans by warehousing them in the Irish Nationwide was wrong. I don’t know enough about the circumstances to know if he broke any law. Even if he did, it certainly was not the cause of the collapse of Anglo.  

The Irish people have suffered due to the banking collapse. This does not justify criminalising the bankers or the politicians.


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## Mpsox

I always thought that under the Companies act, if you deliberately provide false information to the auditors that you could be jailed for that. If the banks deliberatley provided wrong information to NAMA or if directors did not disclose some of their deals, could that qualify as providing false information and if so, why not jail them?


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## Brendan Burgess

Hi MP

I don't know whether or not the Acts say that. If they do, and the judges consider that the offences merit jail sentences, they should go to jail.

However, none of the offences you mention caused the banking crisis. 

Brendan


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## DB74

TBH Brendan, it's not so much the not-going-to-jail thing that bothers people so much

It's more the fact that a lot of the bankers, politicians, & builders are feeling no pain whatsoever in these times.

We see the Bertie Aherns, Brian Cowens, Mary Harneys etc quitting politics on massive pensions & benefits having overseen the vast majority (if not all) of incompetent legislating and enforcement that epitomises their tenure in office.

We see former "millionaire" builders hiding behind the veil of corporate limited liability, being able to liquidate their companies to the detriment of the small builders while still living in massive mansions & driving big cars and now they are being paid to run their bankrupt empires and being paid good salaries to do so, all from the public pocket.

We see bankers who oversaw all the lending to the builders etc transferring valuable assets to spouses, thereby leaving the legal system with seemingly no recourse to collect any money that they previously borrowed from the institutions that they were running.

I don't care whether people go to jail or not but I do want to see pain being suffered by the people at the top because there is a hell of a lot of pain at the bottom.


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## Brendan Burgess

It might or might not be. Again, it was not the cause of the banking crisis. 

If this transaction was done with the approval or the encouragement of the Financial Regulator, it would be very hard to send someone to jail for it. I don't know if this is the case or not.


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## Brendan Burgess

DB74 said:


> TBH Brendan, it's not so much the not-going-to-jail thing that bothers people so much
> 
> It's more the fact that a lot of the bankers, politicians, & builders are feeling no pain whatsoever in these times.



I agree with some of what you say. But I am primarily trying to explain why people are not going to jail for the banking collapse.


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## ANORAKPHOBIA

Brendan Burgess said:


> It might or might not be. Again, it was not the cause of the banking crisis.
> 
> If this transaction was done with the approval or the encouragement of the Financial Regulator, it would be very hard to send someone to jail for it. I don't know if this is the case or not.


 
If this was the case surely the first person to find themselves slopping out every morning should be the said regulator.


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## Mpsox

Brendan Burgess said:


> It might or might not be. Again, it was not the cause of the banking crisis.
> 
> If this transaction was done with the approval or the encouragement of the Financial Regulator, it would be very hard to send someone to jail for it. I don't know if this is the case or not.


 
Is "I was only following orders" a legitmate defence?


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## LDFerguson

It occurs to me that the actions of certain bankers has enriched them and left an awful lot of people poorer.  

It's true that the process by which they did this is not nearly as clear cut as stealing or fraud.  It has been said, it wasn't necessarily one single action that caused it, or one individual.  It can even be argued that the bankers didn't intentionally set out to cause other people to be poorer by their actions.  But some of them were guilty of actions that were certainly "wrong" and possibly illegal, such as warehousing loans to hide from their auditors, reckless trading etc.  

So if the result was the same and there were some wrong actions committed, surely the law has flexibility to dole out more severe punishment than would be normal for other white-collar crime?  In other words, if a banker is convicted of some technical white-collar offense for warehousing a loan, could the punishment not be far more severe than would be normal for this offense, given the disastrous results it contributed to?  

As parallel, if I get caught for speeding I will get a fine or penalty points.  But if I injure or kill someone because I was speeding, I presume my punishment would be far more severe because of the effects of my actions, even though it was never my intention to hurt anybody.  (I'm not comparing the two for any other purpose than to illustrate my point, by the way.)


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## onq

The OP and articles referred to therein appear to be apologia for those who perpetrated the current economic crisis.

I am of the firm opinion that we must seek to hold accountable people who represented themselves as and were paid as professionals who enriched themselves by giving improper advice.

Where a great wrong has been committed, and where negligence, non-disclosure and incompetence occurred at the time and subsequently, justice must be done and must be seen to be done.

If the government does not at least pursue the so far unperturbed main actors in this affair at the same time as imposing draconian budgets, the government will betray the trust of the electorate.

A government rules with the consent and support of its citizens - this one was elected on a promise of change - abusing that faith leads down the road to a divided society, civil disobedience and anarchy.


ONQ.


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## Bronte

If this were Amercia we won't be even having this debate.  

Why?  

Because most of them would have had at the very least been asset stripped and plenty would be in jail.


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## Bronte

Brendan Burgess said:


> It was greed, stupidity, arrogance, incompetence and recklessness which caused the banking crisis. It wasn’t fraud or dishonesty.
> 
> .


 
Is recklessness not dishonesty?  Is transferring assets to your spouse not a fraud, in order for your creditors not to get paid.  That's tickedy boo in Ireland but in the US, David Drumm, they are taking a whole different view point.  Why is that, that is what we should be asking.


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## Bronte

On a final note, as this topic will send me over the edge, why don't we look at reasons why they should go to jail, not why they should not go to jail.


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## Brendan Burgess

Bronte said:


> Is transferring assets to your spouse not a fraud, in order for your creditors not to get paid. .



It may or may not be depending on the circumstances and the time when it happened. 

However this thread is about why no one is going to jail for the banking crisis.

Transferring assets did not cause the crisis. 
Lending Seán Fitzpatrick €100m did not cause the crisis.
Not disclosing it in the accounts did not cause the crisis.

As I said in my original post



> It’s possible that some of our top bankers have been involved in fraud or theft.



If people were involved in fraud or theft, they should be prosecuted for it. 

But it was bad lending decisions which caused the banking crisis and these decisions are not criminal offences.


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## DerKaiser

Shareholders, debtholders & depositors supplied large amounts of capital to the banks. There was no point in banks sitting on capital so they went out and did bad deals. This was because there was far more liquidity supplied than could reasonably be used to do good deals. 

Did the banks deliberately cook the books?  

Yes. They fudged loans to directors in the accounts and they masked the state of the deposit base.

As far as I know this is an illegal misrepresentation of the accounts. Such misrepresentation helped their flow of credit to continue enabling them to lose more and more i.e. deliberate accounting misrepresentation was a significant driver of the banking crisis. 

Also, they artificially propped up their share price through non-recourse loans to fund share purchases. I'm again open to correction but was led to believe this is illegal.


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## Brendan Burgess

DerKaiser said:


> Yes. They fudged loans to directors in the accounts and they masked the state of the deposit base.
> 
> As far as I know this is an illegal misrepresentation of the accounts. Such misrepresentation helped their flow of credit to continue enabling them to lose more and more i.e. deliberate accounting misrepresentation was a significant driver of the banking crisis.
> 
> Also, they artificially propped up their share price through non-recourse loans to fund share purchases. I'm again open to correction but was led to believe this is illegal.



Hi DerKaiser

These all refer to Anglo and not to any of the other lenders. These happened well after the crisis had hit. They did not contribute to the banking crisis.  Whether these were done or not, Anglo would have gone bust. 

As I said in my first post



> It’s possible that some of  our top bankers have been involved in fraud or theft. It has been  alleged that some loans were made non-recourse when it was known that  the banks were in trouble. Some other allegations have been made and are  the subject of Garda investigations. But these were not the cause of  the banking failure. If bankers or anyone else were involved in fraud,  they should be prosecuted. If the fraud was serious, then the judge will  decide whether a jail sentence is warranted.


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## Ceepee

Bronte said:


> If this were Amercia we won't be even having this debate.
> 
> Why?
> 
> Because most of them would have had at the very least been asset stripped and plenty would be in jail.



The most high-profile cases in America are different for two reasons in particular, as I see it:

1. Plea-bargaining: John Rusnak, for example, pleaded guilty to lesser charges in order to avoid a possible maximum 30 year jail term.  Pleading guilty meant the burden of proof on the prosecution was for obvious reasons less onerous, but the extraction of a guilty plea was seen as a success, and a satisfactorily speedy one at that.  Michael Milkin, the Junk Bond King, also plea-bargained.  We don't have that system here - instead, the DPP can only instruct a prosecution of there is sufficient evidence.

2. Evidence: individual rogue traders, once exposed, have nowhere really to hide, as trades can then be traced back to reveal the scale and length of the deception.  But identifying who moved what in Anglo seems to be still under investigation.  And unlike certain senior executives who attract a lot of public ire, Bernie Madoff pleaded guilty once he realised the game was up.


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## Brendan Burgess

Rusnak, Millkin and Madoff did not cause the banking crisis. They were just plain fraudsters who were convicted and jailed. 

We haven't had that scale of fraud in Ireland, but fraudsters have been jailed. They are less high profile, so they get less media attention.


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## DerKaiser

Brendan Burgess said:


> These happened well after the crisis had hit. They did not contribute to the banking crisis.  Whether these were done or not, Anglo would have gone bust.



But someone should still go to jail - It doesn't matter that these weren't the acts bankrupted the country.  

In any case they are symptomatic of the general reckless behaviour (legal or not) and it won't matter to us whether the specific act of recklessness punished had any macro impact.  Kind of like being booked for persistent fouling, the booking might not relate to the worst of your misdemeanours but you certainly deserve it.

Also, the more recent dodgy transactions that are in the public domain are unlikely to be one-offs, but that's just speculation.


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## bullworth

ANORAKPHOBIA said:


> If this was the case surely the first person to find themselves slopping out every morning should be the said regulator.



+1 . Followed by any member of government who can be proven to have pressured him not to regulate.

Question : Did the regulator do his job or not yes or no ?

Question : Did the government of the day over their decade in power interfere in the work of the regulator ?




Brendan Burgess said:


> Transferring assets did not cause the crisis.
> Lending Seán Fitzpatrick €100m did not cause the crisis.
> Not disclosing it in the accounts did not cause the crisis.



They and others contributed to our problems though. You're never going to find just one person to blame unless you look right to the top but even there I believe there is such a thing as collective cabinet responsibility.


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## Brendan Burgess

DerKaiser said:


> But someone should still go to jail - It doesn't matter that these weren't the acts bankrupted the country.



It's not fair to say "someone should go to jail..." as if this will somehow satisfy the mob. 

If someone is found guilty of a serious crime, they should go to jail. If many people are found guilty of serious crimes, they should all go to jail.

Brendan


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## onq

Its possible to argue no-one did anything if you take it to the limit.
Say a guy shots a man and kills him in a premeditated manner.

Let's apply some event-deconstructing logic to this -

- Buying the gun didn't kill the man.
- Loading the gun didn't kill the man.
- Carrying the gun in a concealed manner didn't kill the man.
- Pointing the gun didn't kill the man.
- Pulling the trigger didn't kill the man.
- The unfortunate route of the bullet through the aorta didn't kill the man.
- In fact the bullet could statistically have passed through the man without incident.
- The man could have moved causing the bullet to miss.
- The bleeding could have been brought under control and the man need not have died
- The man died from blood loss after an unfortunate accident.

Sorry, I don't buy that kind of logic.
These people all but destroyed our economy.
A monstrous crime against prince and pauper alike.


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## onq

Brendan Burgess said:


> It's not fair to say "someone should go to jail..." as if this will somehow satisfy the mob.
> 
> If someone is found guilty of a serious crime, they should go to jail. If many people are found guilty of serious crimes, they should all go to jail.
> 
> Brendan



It is entirely fair to say "someone should go to jail" when a monstrous crime has been committed against a nation and a people.

And if we find that this monstrous crime is not spelled out in some statute or other, simply because of the scale of it and the unimaginable over-reaching effects of it, we'll convene a fact finding tribunal like they did after WWII and set a precedent.


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## onq

You know, reading back over the past three posts I see we're not that far apart.

I think we're stuck on our differing definitions of "crime".

That can change.


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## DerKaiser

Brendan Burgess said:


> It's not fair to say "someone should go to jail..." as if this will somehow satisfy the mob.
> 
> If someone is found guilty of a serious crime, they should go to jail. If many people are found guilty of serious crimes, they should all go to jail.
> 
> Brendan



Absolutely. If it's proven the actions taken to prop up the share price and deliberately misrepresent the accounts were crimes the perpetrators should be jailed.


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## Jim2007

Bronte said:


> If this were Amercia we won't be even having this debate.
> 
> Why?
> 
> Because most of them would have had at the very least been asset stripped and plenty would be in jail.



I've yet to hear of anyone going to jail in the US for their actions during the boom and in their case there is clear evidence of mortgage fraud in many situations....

During the same period, a UBS employee who acted as whistle blower on millions that wealth Americans were hiding away, was give sent to jail for 42 months, while at the same time his boss was allowed to talk free....

And of course we should not forget that at end of Dot Com boom, despite all Eliot Spitzer's prosecutions only a couple of out and out criminals went to jail.  In fact the only one of note I can remember  who went to jail was Marta Steward! 

I'm not all impressed by the US legal system...

Jim.


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## Jim2007

onq said:


> It is entirely fair to say "someone should go to jail" when a monstrous crime has been committed against a nation and a people.



Well in that case lets put the Irish citizen in jail after all he voted in the politicians, he was the one that borrowed the money, built up the credit card debt and even when everyone knew it was out of control, he still kept repeating himself!!!

There was no monstrous crime committed as you suggest, was and is the nature of bubbles and there is is very little that anyone can do!!!  Several months back I recommended a book called "Extraordinary Popular Delusions & the Madness of Crowds", if you have not already read it, I really suggest that you do, because it shows how out of control people get during bubbles.

At the moment, we are experiencing a small property bubble here in Switzerland, as a result of all the cash being deposited in Swiss banks and their need to lend it out in order to make a return.  Last week the Swiss government moved to try and defuse the growing bubble by requiring all borrowers to put up a minimum of 20% of the purchase price in hard cash.... immediately there was an out cry from the building industry, from borrowers and so on.  But the Swiss government had the luxury of being able to point to the Irish situation as the reason for their actions, without that recent example, they would have had very little chance of convincing the people, who go the polls in October of accepting it.  Crowds tend to have a very short memory!

And while I believe there is not much we can do to prevent bubbles, there is a lot as individuals we can do to ensure that we are not overly impacted by then.

Best regards,

Jim.


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## bullworth

Jim2007 said:


> Well in that case lets put the Irish citizen in jail after all he voted in the politicians, he was the one that borrowed the money, built up the credit card debt and even when everyone knew it was out of control, he still kept repeating himself!!!



Well the Irish citizen who had least responsibility is certainly suffering now apart from the protected sectors who held most responsibility and who had their hands on the tiller of the economy. Nobody was elected on a platform of destroying the economy, bailing out bankers and developers and setting up NAMA. Nobody had fraud in their election manifesto. It's unfair and unreasonable to expect the average citizen  to have an understanding of economics to degree level. The average social contract was that they get their degrees etc and then work 9 to 5 or longer plus hours of commuting due to bad planning leaving no time for these nighttime economics classes whereas the politicians  and civil servants had the best pay and conditions of everyone. After all it's those in power who had the best education , grew up with a silver spoon in their mouths etc. To then take more than their fair share when already given so many advantages in life is pure greed. And not one of them has suffered compared to someone who needs to buy schoolbooks and might overlook paying their TV licence.
It's inescapable logic that those employed to do a specific job failed to do it. Let's start with the regulator and the ex government. If  regulators etc were charged with negligence and a dereliction of duty;  and if  a case could be proven against anyone then it wouldnt be long before whistles start getting blown and more people get the attention they deserve. Perhaps its the case that our whole body politic is corrupt and that everyone including the obvious scapegoats knows where everyone elses bodies are buried therefore none of them are going to jail  because to do otherwise is to bring them all down.


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## onq

Jim2007 said:


> Well in that case lets put the Irish citizen in jail after all he voted in the politicians, he was the one that borrowed the money, built up the credit card debt and even when everyone knew it was out of control, he still kept repeating himself!!!
> 
> There was no monstrous crime committed as you suggest, was and is the nature of bubbles and there is is very little that anyone can do!!!  Several months back I recommended a book called "Extraordinary Popular Delusions & the Madness of Crowds", if you have not already read it, I really suggest that you do, because it shows how out of control people get during bubbles.



The responsibility of the government is to govern. They didn't.
The responsibility of the lending companies is to advise their clients competently and professionally. They didn't.
The responsibility of company directors is to run the company within the law and disclose the company accounts truthfully. The didn't.

These things together resulted in a monstrous crime perpetrated against the electorate, when the previous incompetent government shored up the perfidious, lying banks having failed to regulate them.

You apologia above is of the same species as suggesting it would be okay for police to fail to contain a riot - because people sometimes riot! It wouldn't.


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## Brendan Burgess

> These things together resulted in a monstrous crime perpetrated against the electorate



Hi Onq

What particular criminal law did they break. The whole point of this thread is to try to explain that for someone to go to jail they must commit a crime. Incompetence is simply not a crime. 

You might feel very annoyed at incompetence of our regulators, our politicians and our bankers, but until you have identified a crime, you shouldn't accuse them of being criminals - especially monstrous criminals.


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## onq

Hi Brendan,

Negligence is not just a civil matter, where it leads to death,   significant loss of profit or personal wealth, or in this case beggars   and economy.

_"In general, legislators have criminalised  actions which are agreed  to be "morally wrong", which have serious  adverse consequences on a  society-wide basis, which were intentional and  for which there was no  reasonable excuse."_

That's a good rule of thumb in this case.

A lot of people have taken their own lives over the present economic   disaster and Ireland has gone from being the most successful European   economy to one of the worst.

It is disgraceful to see people of your stature apparently paving the   way for a do-not-go-to-jail card for the people who brought this   disaster upon us.

These are people who misled the government into giving the banking   guarantee and who - to this day, in the case of former Anglo employees -   are refusing to divulge pertinent information to the authorities  trying  to manage and investigate this massive fraud perpetrated on the  Irish  people.

There is no "reasonable excuse" for their behaviour.

It is even gilding the lily to suggest it was negligence.

In my opinion this was done knowingly and with foresight, because the  banks knew they would be bailed out by the government just like they  were following the ICI Scandal.


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## Black Sheep

What really gets under my skin and the skin of many others is, not a shred of punishment was given to these people, bankers, politicons, regulator,senior civil servants etc. 

Those who lost their jobs were rewarded with golden hand shakes. Why would they remain on in a job if they could go a couple of years early on full pension plus the lump sum to set them up nicely in retirement. 

If that's the way to reward incompetence, how is good behaviour rewarded?????????


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## Jim2007

onq said:


> The responsibility of the government is to govern. They didn't.



Agreed, but the people have accepted it???




onq said:


> responsibility of the lending companies is to advise their clients competently and professionally. They didn't.



To the best of my knowledge, the bank has customers not clients and they have no more responsibility to them than the corner shop!



onq said:


> responsibility of company directors is to run the company within the law and disclose the company accounts truthfully. The didn't.



If that is the case, then in time I expect that those directors will be prosecuted.  However, so far the only questionable act I have heard is the B&B of the famous loans and that is it.



onq said:


> things together resulted in a monstrous crime perpetrated against the electorate, when the previous incompetent government shored up the perfidious, lying banks having failed to regulate them.
> 
> You apologia above is of the same species as suggesting it would be okay for police to fail to contain a riot - because people sometimes riot! It wouldn't.



I can understand your frustration, but at the end of the day you can only send people to prison for crimes they have committed.  And so far we're very long on opinions and very shot on evidence!

Back in the 1980s I worked in the insolvency dept. of one of the big 4 accounting firms and I worked in drawing up the book of evidence in a few cases against directors and I can tell you that it is not as easy as everyone thinks to go after someone!  First of all hinsight counts for nothing and there in lies the problem how to do you prove that say back in 2005 one person had such fantastic insight that they saw what was coming and used it to exploit others.  You can only hold people to the standards and norms that were in place that the time, not what you see to be true in hinsight.  Can you hold an estate agent or similar professional at fault for placing a valuation of 400K on a property at the time and is now only worth say 200K on the basis that he should have known what was coming???

As I have already said, bubbles are a fact of life and there is not much we can do to stop them.  All we can do is try to understand them and hopefully avoid being pulled into them at a personal level.

Jim


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## Jim2007

onq said:


> In my opinion this was done knowingly and with foresight, because the  banks knew they would be bailed out by the government just like they  were following the ICI Scandal.



Let me ask you this, as someone who works in the building industry what did you do to warn your clients of the impending melt down???  

Jim


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## Guest105

Ahem .......anyone who says the banks have a clear conscience must be mad, what did they do to stress test all those who over borrowed, giving hundreds of thousands of euro to people who were near retirement age to buy investment properties and overseas holidy homes, releasing equity in homes where people had no means of paying it back. Was there not a case on here somewhere of a 21 year old getting a massive mortgage and what about those letters the banks posted thorugh our letter boxes literally begging us to borrow x amount. No one forced anyone to borrow but there is enough evidence out there to say the banks failed in their duty of care and they are sure paying the price for it now. They went to jail for their crimes in America why not Ireland.


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## Jim2007

cashier said:


> Ahem .......anyone who says the banks have a clear conscience must be mad, what did they do to stress test all those who over borrowed, giving hundreds of thousands of euro to people who were near retirement age to buy investment properties and overseas holidy homes, releasing equity in homes where people had no means of paying it back. Was there not a case on here somewhere of a 21 year old getting a massive mortgage and what about those letters the banks posted thorugh our letter boxes literally begging us to borrow x amount.



As long as a bank adheres to the various capital ratios etc... set out by the regulators, it is free to set it's own credit and lending policies.  There is no obligation to stress test anyone or do anything else in respect of ensuring  that a person is in a position to pay back the money.  As the law stands, a bank is just like the corner shop or a supermarket - it offers certain products to the public and it is up to the public to buy them or not as the case may be.  If you want financial advice you consult a financial advisor or an accountant, not a bank!!! 



cashier said:


> one forced anyone to borrow but there is enough evidence out there to say the banks failed in their duty of care and they are sure paying the price for it now. They went to jail for their crimes in America why not Ireland.



A bank has no duty of care to a customer, just as a supermarket does not have a duty of care to ensure that it's customers don't eat to much fatty foods or whatever!

As for the US, please provide us with a list of who went to jail in the US for mortgage fraud... I've seen this statement here several times now, but I've yet to see the facts to match it.

In a bubble, bankers do what bankers do, consumers do what consumers do, but politicians seldom do what politicians should do - burst the bubble!  The government should have shown leadership and the opposition should have challenged them, but this never happened!  But then again would the people have accepted it? I doubt it, the last thing people what to hear is bad news.  

The ironic thing about bubbles is that more money is often lost just after the pop than before it, as people who missed out rush in to grab their chance and this despite there being clear evidence of the ship is going down!  And I believe that is happening today in Ireland, we have lots of people running around trying to get mortgages to buy property, for which there is no really way to judge value, since the market is defunct!  Should we do something to stop them and if so what???

Jim.


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## onq

Jim2007 said:


> Let me ask you this, as someone who works in the building industry what did you do to warn your clients of the impending melt down???
> 
> Jim




Had a quite animated discussion with one major client around the time Cowan was toying with raising capital gains tax from 20-40%. It never happened as you may recall.
I strongly suggested to my client that it needed to happen to take the heat out of the system, and that the government needed to seriously look at the whole tax incentives thing or the economy would overheat.
At that stage there was no hint of a world economic crisis and the discussion on his part centred on the collapse of the building boom, but I wanted it a gradually level off - the fabled "soft landing" - and knew that if we didn't face into it voluntarily we would be forced into it sooner or later.
"Quite animated" doesn't begin to describe my client's reaction at the time. Totally against any measures that might impede the year-on-year growth. Had a court judgement for millions against him earlier this year.

Another client bought a site in 2006 for silly money and came to me afterward seeking permission - having not asked my advice before buying. I asked him whether he could sell it again immediately. Not interested in doing that. Owes millions now.

I also tried to warn people about buying second properties. We had looked at a purchase around that time or shortly afterwards and all we could see were bubbles already growing quickly. One year a house a few miles outside Gorey in Wexford was €178K, less than six months later it was €240K. Against a LOT of pressure from someone very influential to me I was pressured into buying. I didn't. Much chagrin followed for several years. That estate is now a forest of "For Sale" and "To Let" signs.

Finally another client came to me with a problem site and asked me to get a permission on it, which I did. Afterward he instructed me to take it to site and between one thing and another, I strongly suggested he sell it instead, even though it would have looked very well in my portfolio of built work. He got out with his shirt and a small profit.

You have to understand that developers are often caught up in their own  personhood. They get the bit between their teeth and think they are  invincible decision makers.
You're limited to whom you can reach Jim. I did what I could for those I could influence and acted in a fiduciary manner toward them at all times even when they really preferred I just told them the comforting but wrong advice they wanted to hear. Those that listened, benefited from my advice.


----------



## The Edge

Bronte said:


> If this were Amercia we won't be even having this debate.
> 
> Why?
> 
> Because most of them would have had at the very least been asset stripped and plenty would be in jail.


 
This is a common canard but also completely untrue.

Very few American bankers have been jailed in the aftermath of the US financial crisis.

The oft-cited case of Madoff is of no relevance to the broader banking collapse. He was not a banker but a ponzi scheme operator, who pleaded guilty at the first opportunity. His fund would eventually have collapsed regardless of the banking crisis.


----------



## The Edge

Brendan Burgess said:


> The Irish people have suffered due to the banking collapse. This does not justify criminalising the bankers or the politicians.


 
Good post, Brendan, but in our tabloid witchhunt driven media, unlikely to gain much traction.

I agree with your analysis. A moment's sane consideration will show that the idea that bankers deliberately and fraudulently engineered the crash simply does not make sense. For starters, most of them lost out heavily from a financial point of view by virtue of being heavily invested in their own banks' shares, not to speak of the reputational damage.

When Fitzpatrick points out that he himself has been one of the main losers from the crash, he does not make himself any more popular with the public, but on this occasion, at least, he happens to speaking the unvarnished truth.


----------



## Mpsox

Jim2007 said:


> A bank has no duty of care to a customer, .


 
Not true

Banks have a duty to ensure that they


1 act honestly, fairly and professionally in the best interests of its 
customers and the integrity of the market;
2 act with due skill, care and diligence in the best interests of its ​​
customers;
3 do not recklessly, negligently or deliberately mislead a ​​
customer as to the real or perceived advantages or disadvantages of any product or service;

This is laid out in the Financial reguulator code of practice 2006​ 
They also have to ensure that they adhere to the Consumer Credit Act where relevant​ 
The problem for many customers when applying for loans is that they stupidly/naively waived many of their rights, for example, right to take external legal advice​
​


----------



## Leper

Like I always believed on this issue . . . nobody did wrong.  Nobody's goin' into the clink.  Also, Social Welfare fraud is at its height and guess what? Nobody's goin' to jail here either.  They all took their commissions, they bankrupt the country, they wiped out peoples life savings, they loaned and loaned and loaned and nobody is going to have to answer. The quicker the Revenue Commissioners go after them the better.  Everything that was done cannot have been totally within the law.


----------



## onq

Thanks for that Mpsox - saved me trawling for it and posting it.

The achilles heel of the Banks is that they were SUPPOSED to act professionally, and they didn't.

Their hope is that this "code" can be used as a fig leaf to suggest that no law was broken and so no crime was committed.

They further rely on the hope that any new law cannot be made retrospective, despite the damage done to lives, families and the economy.

I believe that unless people are prosecuted for the breaches of the code, supported by laws as may be required, some people will take matters into their own hands.

The only thing that has stopped people being lynched over this up until now is the belief that the government was doing something about it.

While a code of practice isn't a law, and a specific legal backup for that code may not be there yet there may be other measures.

Think Criminal Assets Bureau and the Fraud Squad.

Or new laws.


----------



## csirl

> Their hope is that this "code" can be used as a fig leaf to suggest that no law was broken and so no crime was committed.


 


> What particular criminal law did they break. The whole point of this thread is to try to explain that for someone to go to jail they must commit a crime. Incompetence is simply not a crime.


 
You regularly hear people saying that you cannot get a criminal conviction because there is no written legislation that specifically states that what happened was a crime.

However, these people forget that we live in a 'common law' country. It is not necessary for written legislation to exist to get a criminal conviction. If a jury of peers believes the person is guilty of a crime, then they can be convicted. A good example of this is murder - in this country, murder is usually tried as a common law offence with no reference to breaking any legislation.


----------



## onq

Thanks for that csirl.

I was thinking along the lines of a judicial inquiry with fact-finding abilities and the power to compel witnesses to attend, including seeking extradition where required. Would that be possible do you think?


----------



## FERGUS O'ROU

csirl said:


> However, these people forget that we live in a 'common law' country. It is not necessary for written legislation to exist to get a criminal conviction. If a jury of peers believes the person is guilty of a crime, then they can be convicted. A good example of this is murder - in this country, murder is usually tried as a common law offence with no reference to breaking any legislation.



That is a useful issue to raise, and I intend to address it later (sorry Brendan, my longwindedness is interminable ) in my series of posts. Fintan O'Toole obliquely mentioned it in a column he wrote on December 27.

Murder is no longer simply a common-law offence, but that position only changed recently, and, while I am sure that some reason provoked the change, it is true that before that it had not been made a crime by any Act of Parliament/Oireachtas. There are others like that, I am sure, but they are not common (no pun intended). (I am not a criminal law specialist).

It is also true that juries have influenced and do influence the development of the Common Law, but not in the way suggested. A jury cannot invent or discover a "new" crime and then convict someone of it: they can only convict or acquit of a crime which the prosecutor has charged the defendant with committing.

What might be worth exploring is whether a charge could be devised which could be accurately described as arising genuinely from the Common Law and which might be applied to some of the miscreants. I have given that possibility some thought, but have not really researched it, and I am not inclined to do so. 

Why ? Because I do not really expect the search to be successful. But I could be persuaded otherwise, possibly.

Fintan O'Toole cited the City of Glasgow Bank case, but that is of no help because the crimes in question, where still relevant (company law has rendered the whole context largely archaic) have now been made statutory. In any case, I am very sceptical that shareholders or bondholders of the Irish banks could prove that they were criminally misled.


----------



## FERGUS O'ROU

Bronte said:


> If this were Amercia we won't be even having this debate.
> 
> Why?
> 
> Because most of them would have had at the very least been asset stripped and plenty would be in jail.



Michael Noonan while still in opposition claimed that 40 bankers had gone to jail in America for their part in causing the banking crisis. I was (and am) unaware of *even one. *I wrote to Mr Noonan asking him to tell me who he knew about that I did not. No reply.

Do you want to have a go yourself ?


----------



## onq

FERGUS O'ROU said:


> That is a useful issue to raise, and I intend to address it later (sorry Brendan, my longwindedness is interminable )



Compared to me you're concise, but I imagine its in the nature of the beast.


----------



## onq

FERGUS O'ROU said:


> Michael Noonan while still in opposition claimed that 40 bankers had gone to jail in America for their part in causing the banking crisis. I was (and am) unaware of *even one. *I wrote to Mr Noonan asking him to tell me who he knew about that I did not. No reply.
> 
> Do you want to have a go yourself ?



America is the last place I would expect to see bankers to go to jail.

Its not known as the land of the second (and third, and fourth, etc) chance for nothing.


----------



## onq

The Edge said:


> Good post, Brendan, but in our tabloid witchhunt driven media, unlikely to gain much traction.
> 
> I agree with your analysis. A moment's sane consideration will show that the idea that bankers deliberately and fraudulently engineered the crash simply does not make sense.


Straw man argument.
Whether they actively engineered the crash is open to debate - sane debate.

What is not open to debate is the  fact that they engineered the boom by lending at unsupportable levels.
What is not open to debate is that lenders and vendors agents conspired to sell cheap loans to people to boost their bonuses.

They consistently failed to apply tried and tested and vetting procedures good lending practices and regularly advised people inappropriately.
They demonstrably acted unprofessionally and to suggest otherwise in the face of the current financial disaster betrays a monumental level of denial.

These levels of lending would sooner or later have led to difficulties for the borrowers if the boom had kept going.
Interest rates would have risen and people on 100% mortgages at low interest rates they could barely afford would have defaulted.


> For starters, most of them lost out heavily from a financial point of view by virtue of being heavily invested in their own banks' shares, not to speak of the reputational damage.


The fact that they couldn't even act in their own self interest shows the extent of their negligence.
They were clearly trading beyond their ability and competence - sooner or later reputational damage is the inevitable follow-on.


> When Fitzpatrick points out that he himself has been one of the main losers from the crash, he does not make himself any more popular with the public, but on this occasion, at least, he happens to speaking the unvarnished truth.


Popularity with the public?
Another straw man argument - public popularity didn't strike me as one of his ambitions.
People who take risks with their own or with other people's money seldom attract much sympathy when they say they finally lost a gamble.


----------



## csirl

FERGUS O'ROU said:


> It is also true that juries have influenced and do influence the development of the Common Law, but not in the way suggested. A jury cannot invent or discover a "new" crime and then convict someone of it: they can only convict or acquit of a crime which the prosecutor has charged the defendant with committing.
> 
> What might be worth exploring is whether a charge could be devised which could be accurately described as arising genuinely from the Common Law and which might be applied to some of the miscreants. I have given that possibility some thought, but have not really researched it, and I am not inclined to do so.
> 
> Why ? Because I do not really expect the search to be successful. But I could be persuaded otherwise, possibly.
> 
> .


 
Yes, its true that the jury can't devise a crime - they judge whether the alleged offence put to them is criminal. But, as with the aforementioned murder charges, the DPP can devise new common law charges. It doesnt really matter if these charges have been used in the past, though it helps a lot - all that matters is whether the DPP can convince a jury that what happened was criminal.

The obvious common  law crimes that could apply are:

"undermining the public finances"

and

"unjust enrichment"


----------



## onq

I'd be interested to hear a view on whether new legislation to support such charges in statute would be a hindrance or a help in pursuing the perpetrators at this time,. i.e. after the fact.

Perhaps that's best left for another thread though.


----------



## FERGUS O'ROU

LDFerguson said:


> So if the result was the same and there were some wrong actions committed, surely the law has flexibility to dole out more severe punishment than would be normal for other white-collar crime?  In other words, if a banker is convicted of some technical white-collar offense for warehousing a loan, could the punishment not be far more severe than would be normal for this offense, given the disastrous results it contributed to?
> 
> As parallel, if I get caught for speeding I will get a fine or penalty points.  But if I injure or kill someone because I was speeding, I presume my punishment would be far more severe because of the effects of my actions, even though it was never my intention to hurt anybody.  (I'm not comparing the two for any other purpose than to illustrate my point, by the way.)



These are good questions

1. IMHO the loan warehousing had zero to do with the banking collapse.

2. But your general point, the one of the "speeding" analogy, remains. My response to that is that you'd have to establish a causal relationship between the "speeding" and the fatal results. If two cars are in fatal collision, and the surviving driver was speeding, he will not be convicted of dangerous driving causing death unless the speed was a factor contributing to the accident or its severity. (It may often be, but it is not always, by any means). 
3. All the same, that driver may be prosecuted for the speeding and probably will get a higher fine because of the fatality. However, if he was badly injured himself, chances are that he won't, I suspect.


----------



## onq

FERGUS O'ROU said:


> 1. IMHO the loan warehousing had zero to do with the banking collapse.



I disagree.

Warehousing of loans was but one symptom of avoiding regulation which was in place to prevent improper procedures.
A particular instance may offer concrete evidence of criminal intent, which goes beyond merely being negligent.

Conniving and concealment had their parts to play in the boom that led to the collapse.
None of the events or components of events should be looked at in isolation.


----------



## 44brendan

Surely we are looking here at one of the downsides of living in a democratic society. There is little doubt that the neglegence and incompetence of many bankers developers, legislators and regulators led to compounding the effects of the economic crisis. However under our present legal system neglegence and incompetence are not a crime and our laws of proof would be difficult to satisfy in terms of providing an acceptable case of deliberate fraud against those that may have beneffitted from these acts.
We live in a society where our justice system does undoubtably allow many who transgress the law and the principles of equity and fairness escape with no legal consequences to their actions. The difficulties that would arise in creating new laws to cater for events such as this is that once you "open the box" on this issue it is difficult to close it. As far as I am aware (and I am open to contradiction on this) our laws on fraud and issues of proof are broadly in line with most of our democratic contemparies. It does appear that the issues of white collar crime require some revision but backdating legislation in order to punish specific individuals is (in my view) both dangerous and undemocratic. 
Whilst I abhor the fact that many of those that caused this problem have not only gone unpunished but have been highly rewarded for their actions I feel that we should look to the future on these issues rather than the past. Let our legislators and regulators ensure that there are enough fail-safe mechanisims put in place to avoid a repetition of these problems.


----------



## FERGUS O'ROU

onq said:


> The OP and articles referred to therein appear to be apologia for those who perpetrated the current economic crisis.
> 
> I am of the firm opinion that we must seek to hold accountable people who represented themselves as and were paid as professionals who enriched themselves by giving improper advice.
> 
> Where a great wrong has been committed, and where negligence, non-disclosure and incompetence occurred at the time and subsequently, justice must be done and must be seen to be done.
> 
> If the government does not at least pursue the so far unperturbed main actors in this affair at the same time as imposing draconian budgets, the government will betray the trust of the electorate.
> 
> A government rules with the consent and support of its citizens - this one was elected on a promise of change - abusing that faith leads down the road to a divided society, civil disobedience and anarchy.
> 
> 
> ONQ.



1. I have to say that I take offence at the suggestion that I am offering _apologia _on behalf of anyone, but in all the circumstances, I'll forgive you (for the moment, at least)

2. The expression "those who perpetrated the current economic crisis" implies  that the crisis can truly be said to have been caused by an identifiable person or group of persons. I have my doubts that such is actually the case

3. To call advice "improper" is not the same as calling it "criminal". If the latter meaning is what is really intended, then I have to ask you to specify the crimes. People seem to have considerable difficulty doing so

4. I agree that where a great wrong has been committed, justice must be seen to be done. But, again, what "great wrongs" have been committed ? A great disaster has occurred, but that is not the same thing

5. I agree that crimes revealed when, to use Buffett's useful metaphor, "the tide goes out", revealing their "nakedness", should be prosecuted. Mr FitzPatrick's concealment of his loans is a case in point, but that crime did not cause the collapse of Anglo, never mind the rest of Irish banking, and he should not be punished for it as if it did.

6. I also think that those who retired with large pensions and pay-offs (and those who haven't) should have to answer for their stewardship, but I would not necessarily expect that to result in any criminal charges, or in any other charges _e.g_. of non-entitlement to their pensions. I would like it if it did, though. (Is that an _apologia_ ?)

7. My view is that the banking collapse was due to a multitude of factors, some internal to this country (_e.g._ property madness) and some external (_e.g._ loss of risk awareness). The immediate cause was bad lending and the current bank directors should be asking those responsible to explain why they should not be penalised civilly. If they find crime, they should report it, but I doubt they'll find much

8. Anyone who knows better, as I have said on my website, is to be encouraged to initiate a private prosecution, and I am willing to assist them.


----------



## FERGUS O'ROU

Bronte said:


> Is recklessness not dishonesty?  Is transferring assets to your spouse not a fraud, in order for your creditors not to get paid.  That's tickedy boo in Ireland but in the US, David Drumm, they are taking a whole different view point.  Why is that, that is what we should be asking.



1. Recklessness, I think, can indeed be dishonesty, and this is an aspect which I plan to tackle in my series of posts
2. Transferring assets to your spouse in order to deprive your creditors has never been "tickety-boo". I know some media stories have suggested otherwise, but my information is that, for example, NAMA has successfully challenged many such devices. Not everything that looks like a fraudulent scheme is always a fraudulent scheme, though.


----------



## FERGUS O'ROU

Bronte said:


> On a final note, as this topic will send me over the edge, why don't we look at reasons why they should go to jail, not why they should not go to jail.



Yes, let's. 

To go to jail, first conviction of a criminal offence carrying a possible penalty of imprisonment must be achieved. Before that, the person must be charged and tried for the offence and the jury convinced beyond a reasonable doubt. Before that, evidence must be collected, tested and assessed for its probative potential.

(That sounds like something ...I wonder what)

Before any of that, find the criminal offence.

Has anyone done that ?


----------



## FERGUS O'ROU

DerKaiser said:


> But someone should still go to jail - It doesn't matter that these weren't the acts bankrupted the country.
> 
> In any case they are symptomatic of the general reckless behaviour (legal or not) and it won't matter to us whether the specific act of recklessness punished had any macro impact.  Kind of like being booked for persistent fouling, the booking might not relate to the worst of your misdemeanours but you certainly deserve it.



Well, if the recklessness was criminally dishonest, an issue which I have not yet considered properly, then I agree.

But somehow I don't think that you would agree to that condition, and that view is at the heart of the pernicious scapegoating witch-huntery that is so prevalent among certain people.

"Someone should go to jail...[they] certainly deserve it", you say, as if that follows from your emotional reaction to what you concede may be mere misdemeanours.

In our system, to be convicted of an offence and to be sent to prison, it is not sufficient to be unpopular, or to be shown to have "incorrect" opinions, or to have made mistakes which might coincide with Bad Times. You have to have transgressed a legal provision, and the transgression has to be one which, it was agreed in advance, carries with it the possible punishment of prison.

It is not possible to conclude that anyone "deserves" prison until and unless such an offence can be identified, the offender charged and his or her guilt proven beyond reasonable doubt to a jury. (A District Judge might be enough if the crime is minor).

And you cannot invent a new crime to fit what you believe happened: that is prohibited by the Constitution and international conventions, not to mention natural justice (_i.e._ our common sense of right and wrong).

I do not claim perfection for our system, and it does not function well in a reliable fashion, but it is the one we have, it is not bad and there are few better.


----------



## FERGUS O'ROU

onq said:


> Its possible to argue no-one did anything if you take it to the limit.
> Say a guy shots a man and kills him in a premeditated manner.
> 
> Let's apply some event-deconstructing logic to this -
> 
> - Buying the gun didn't kill the man.
> - Loading the gun didn't kill the man.
> - Carrying the gun in a concealed manner didn't kill the man.
> - Pointing the gun didn't kill the man.
> - Pulling the trigger didn't kill the man.
> - The unfortunate route of the bullet through the aorta didn't kill the man.
> - In fact the bullet could statistically have passed through the man without incident.
> - The man could have moved causing the bullet to miss.
> - The bleeding could have been brought under control and the man need not have died
> - The man died from blood loss after an unfortunate accident.
> 
> Sorry, I don't buy that kind of logic.
> These people all but destroyed our economy.
> A monstrous crime against prince and pauper alike.



1. A bullet through the aorta did not kill the man ?
2. The bullet statistically could have passed through without incident ?
3. The man died after an unfortunate accident ?

Who *does* buy that kind of logic ? Who even tries to sell it ?

Who are "these people" ?


----------



## FERGUS O'ROU

onq said:


> It is entirely fair to say "someone should go to jail" when a monstrous crime has been committed against a nation and a people.
> 
> And if we find that this monstrous crime is not spelled out in some statute or other, simply because of the scale of it and the unimaginable over-reaching effects of it, we'll convene a fact finding tribunal like they did after WWII and set a precedent.



That's not a bad analogy, in some ways, but it doesn't really work. 

The Nazis undeniably used violence and killed people. They did not deny that, nor that they were anti-semitic or had a plan for world domination. 

The bankers were pursuing apparently legitimate goals, and had no intention of pulling the house down or "crashing the plane". Many of them bought worthless bank shares right up to the end.

A better analogy is probably an airplane pilot who has been observed flying dangerously for some time with passengers on board, and finally crashes, and is the only survivor, albeit with multiple fractures. As he lies there in agony (and grief-stricken) contemplating the scene, your first thought is that it was deliberate ! 

But back to your own analogy: you don't need to wait for a tribunal, do you ? You already know what the "monstrous crime" is, or think that you do. Why not just simply spell out the elements of the crime ?


----------



## FERGUS O'ROU

onq said:


> You apologia above is of the same species as suggesting it would be okay for police to fail to contain a riot - because people sometimes riot! It wouldn't.



If a riot got out of control, would you charge the police with criminal offences just for that reason alone ?


----------



## onq

FERGUS O'ROU said:


> 1. I have to say that I take offence at the suggestion that I am offering _apologia _on behalf of anyone, but in all the circumstances, I'll forgive you (for the moment, at least)


Given the damage suffered by our economy and electorate, and the fact that you and others appear to be suggesting that  no-one in the Banks should be prosecuted I won't be begging for forgiveness for calling it like I see it.


> 2. The expression "those who perpetrated the current economic crisis" implies  that the crisis can truly be said to have been caused by an identifiable person or group of persons. I have my doubts that such is actually the case


Your expression of doubt is noted but its a naive comment following on the OP's deconstructionist remarks earlier. Pumping cheap money into an economy leads to a boom - ask any of the monetarists, this site is blessed with a lot of them. The sole means to do this were the lending companies, the most prolific of which are well known. This was foreseeable were this done in a competent, qualified manner following good practice. It was not.


> 3. To call advice "improper" is not the same as calling it "criminal". If the latter meaning is what is really intended, then I have to ask you to specify the crimes. People seem to have considerable difficulty doing so


The issue is one of degree, not kind. The crime was fraud on a grand scale. Fraudulent misrepresentation of financial products as being appropriate when by any measure they were not. 


> 4. I agree that where a great wrong has been committed, justice must be seen to be done. But, again, what "great wrongs" have been committed ? A great disaster has occurred, but that is not the same thing


Negligence on a grand scale that has led to suicide and penury for many is not so easily wished away. The great wrong is clear to anyone not using sophistry as a screen through which to filter the world we are currently enduring.


> 5. I agree that crimes revealed when, to use Buffett's useful metaphor, "the tide goes out", revealing their "nakedness", should be prosecuted. Mr FitzPatrick's concealment of his loans is a case in point, but that crime did not cause the collapse of Anglo, never mind the rest of Irish banking, and he should not be punished for it as if it did.


On the contrary, I am quite certain that the tide has not been allowed to go out, as evidenced by Mr. Dukes apparent inability to acquire the necessary access codes to Anglo files. I will be surprised - and this is belief and rank speculation on my part - if we find that moving the odd €80 Million around the accounts was the most interesting of Anglo's activities. Again, fraud and professional negligence are likely to be a part of that disingenuous whole. 


> 6. I also think that those who retired with large pensions and pay-offs (and those who haven't) should have to answer for their stewardship, but I would not necessarily expect that to result in any criminal charges, or in any other charges _e.g_. of non-entitlement to their pensions. I would like it if it did, though. (Is that an _apologia_ ?)


Yes, as far as I'm concerned,  it is, to such a degree and in the face of such an unparalleled disaster that I am concerned to see someone as well respected as you and Brendan Burgess (we don't always see eye-to-eye, but I respect him) being party to it. The coda to the contrary "I would like it if it did, though" seems misplaced given the previously expressed views.


> 7. My view is that the banking collapse was due to a multitude of factors, some internal to this country (_e.g._ property madness) and some external (_e.g._ loss of risk awareness). The immediate cause was bad lending and the current bank directors should be asking those responsible to explain why they should not be penalised civilly. If they find crime, they should report it, but I doubt they'll find much


Here is the great divide that cannot be spanned, never mind crossed. "Bad lending" is the very definition of why the senior bankers should immediately fall on their swords. It went on under their governance and is what directly led to the current crisis, and as far as we know following their insistence on chasing greater market share and thereby raising share price, with the eventual result that most of the middle demographic of Ireland saw their lifes savings and pensions funds whittled away to nothing. The collapse was the coda to a decade of incompetent management of the banks, with the disaster we face the proof of the pudding that they are in an ultimate sense incompetent. These were the people who accepted repackaged sub-prime loans as ASSETS (!) for goodness sake - or SAID they did, which I personally find hard to believe, which started the rot.


> 8. Anyone who knows better, as I have said on my website, is to be encouraged to initiate a private prosecution, and I am willing to assist them.


What I find particularly galling about the current debate is that the proof is there, the dead body is on the floor, the casualties are round about amidst a great weeping and gnashing of teeth and your goodself and Brendan and a few others are standing around scratching your heads asking 

"Was there a crime committed here?"

Unbelievable.

Part of the litany of bad governance and incompetence of AIB - one of the two "pillars" that are being touted around Europe and what the Irish economy will be built on - is listed here.

http://en.wikipedia.org/wiki/Allied_Irish_Banks#Controversy

This is just a simple list and shows a corporate culture that seems to be built on bad practice.

There is plenty more if people want to go digging for the dirt they'll find it - here is a sample betraying their mental juggling.
In their world view, nothing is "wrong", there is no "crime" its something for the solicitors to deal with

[broken link removed]

Senior AIB official =being questioned by an SC about AIBs re disclosure of AIB's 20% interest in Quarryvale

_Q.269 Had AIB's interest had been registered, then the public would have known and
          politicians would have known that they had voted on a project in respect of
          which Allied Irish Bank held 20 per cent interest, isn't that right?

     A.   Presumably the information would have been available to them, yes.

     Q.270 Presumably there are very good reasons why the Oireachtas has decided that 20
          per cent interest in a company should be disclosed on the register of a public
          company, isn't that right?

 30  A.   Presumably they have.

     Q.271 And I presume that the shareholders of Allied Irish Bank would have been
          anxious to know that their company held 20 per cent interest in the Quarryvale
          project?

     A.   Well maybe they would.  I can just say to you that in terms of the -- what
          happened here was we took legal advice and it was done with that full legal
          advice as being a legitimate exercise.  *So if there's any implication that it
          was under hand well then that's a matter for Fry's*.
_ 
==========================================================

Fergus, with the greatest of respect to you and Brendan, there is a widespread feeling that the previous government and the banks treated the electorate like mushrooms.
This systemic mistreatment of the electorate and abuse of the institutions of the state has got to stop and the people responsible have to be held accountable.

Personally, with the multitude of items seeming likely to be discovered, I don't see the current delay in prosecution as the likelihood of their being none.
I think the DPP is considering the likely fallout for Irish business if the full extent of the perfidy becomes known and charting a middle course.


----------



## Purple

FERGUS O'ROU said:


> A better analogy is probably an airplane pilot who has been observed flying dangerously for some time with passengers on board, and finally crashes, and is the only survivor, albeit with multiple fractures. As he lies there in agony (and grief-stricken) contemplating the scene, your first thought is that it was deliberate !


That's actually an excellent analogy.


----------



## FERGUS O'ROU

bullworth said:


> It's inescapable logic that those employed to do a specific job failed to do it. Let's start with the regulator and the ex government. If  regulators etc were charged with negligence and a dereliction of duty.



Agreed that jobs were not done but negligence and dereliction of duty are not criminal offences. (Nor am I certain that *anything* could have totally avoided the disaster).

It may be possible for negligence and dereliction of duty to result in claw back of salary, bonus or pension.


----------



## FERGUS O'ROU

onq said:


> Whether they actively engineered the crash is open to debate - sane debate...
> 
> They demonstrably acted unprofessionally and to suggest otherwise in the face of the current financial disaster betrays a monumental level of denial...
> 
> The fact that they couldn't even act in their own self interest shows the extent of their negligence.



1. You have some sane debating points for the proposition that Irish bankers actively engineered the crash ?
2. Who is denying that they acted unprofessionally ?
3. Not being able to act in their own self-interest tends to negate criminality, though, no ?


----------



## FERGUS O'ROU

csirl said:


> ... But, as with the aforementioned murder charges, the DPP can devise new common law charges. It doesnt really matter if these charges have been used in the past, though it helps a lot - all that matters is whether the DPP can convince a jury that what happened was criminal.
> 
> The obvious common  law crimes that could apply are:
> 
> "undermining the public finances"
> 
> and
> 
> "unjust enrichment"



1. The Oireachtas, not the DPP, re-defined the crime of murder
2. The DPP cannot devise new common law charges. The whole idea of the Common Law is that it represents the inherited corpus of principles, not new crimes. 
3. To proceed as you suggest would put the power of creating new crimes into the hands of the DPP and/or 12 random people. That does not sound like a sensible system
4. Both of the crimes you suggest are a bit vague. How would a person know that they were committing them ?
5 "Unjust enrichment" begs all sorts of questions, unless it really means theft or fraud, in which case why rename them ? 
6. In any case, the situation in which we find ourselves is characterised not by enrichment but by mass impoverishment. The public's "favourite" culprits are actually bankrupt. Another "favourite", Pat Neary, may not be short of a few bob, but I bet he'd prefer to still have a job.Only a very few _e.g._ P.V. Doyle's heirs can really be said to be winners


----------



## Purple

FERGUS O'ROU said:


> Only a very few _e.g._ P.V. Doyle's heirs can really be said to be winners



... and they probably bought land and bank shares with the money.


----------



## FERGUS O'ROU

onq said:


> ...Pumping cheap money into an economy leads to a boom - ask any of the monetarists, this site is blessed with a lot of them...
> The crime was fraud on a grand scale. Fraudulent misrepresentation of financial products as being appropriate when by any measure they were not...
> Negligence on a grand scale that has led to suicide and penury for many is not so easily wished away. The great wrong is clear to anyone not using sophistry as a screen through which to filter the world we are currently enduring...
> On the contrary, I am quite certain that the tide has not been allowed to go out, as evidenced by Mr. Dukes apparent inability to acquire the necessary access codes to Anglo files. I will be surprised - and this is belief and rank speculation on my part - if we find that moving the odd €80 Million around the accounts was the most interesting of Anglo's activities. Again, fraud and professional negligence are likely to be a part of that disingenuous whole.



Forgive me, but a shorter version of the above is:

Onq disagrees and anyone who disagrees with onq is deluded.

More detailed:

1. Pumping cheap money and creating a boom incompetently are not crimes anywhere in the world. If you think that they should be, I'll help you [try to] draft the legislation.
2. "Fraudulent misrepresentation of financial products as being appropriate when by any measure they were not... ", you say. It is indeed easy to say, but not easy to convincingly show. Find me an alleged victim, who is an individual, and we'll see whether that stands up to examination. The courts would be full of victims suing the banks for compensation if it were.
3. More fundamentally, you appear to fail to understand that the banking collapse has really very little to do with excessive lending to "consumers" even as mortgagors, though that did occur. The collapse is really a feature of a developmental property bubble: that is where Anglo's €30bn was lost, for example. The misrepresentation was in the other direction in that market. (That is no excuse for the banks, however.)
4. Who is "washing away" the negligence on a grand scale ? The issue is not whether was such, nor whether it should have consequences for the negligent ones - my answer is affirmative on both counts - but whether it constituted a crime. You continue to avoid that point.
5. Ah, "the computer access codes". I defy you to come up with a clear exposition of that particular story - I suspect that it is pure spin. If there is something to it - which will be surprising given it is never mentioned in any serious discussion of Anglo (it is not in either of the two books on Anglo) - then it may be that some deluded souls who brief media scribblers believe that Anglo has the right to inspect the private e-mail accounts of staff, past and present. 
6. We can all speculate until we are blue in the face about what might have happened behind the scenes at any organisation, but to treat such speculation as fact is to abandon seriousness.

I have not finished, but have to leave it there for the day now, as I have a committment to honour.


----------



## Firefly

Purple said:


> ... and they probably bought land and bank shares with the money.



Perhaps not....I remember reading this article and knowing the game was up!

"The timing of these deals, spearheaded by Bernie Gallagher’s husband John, could not have been better.

In  fact, just after closing the sale of Jurys Inns to Quinlan, Gallagher  said in a newspaper interview that there was no longer an upside in the  Irish property market...."

[broken link removed]


----------



## Firefly

Hi Fergus,

In 2006 there was a Prime Time report into how mortgage brokers were in cahoots with estate agents (often operating in the same building). The mortgage broker would determine the maximum mortgage that an applicant could get. This vital information was passed to the estate agent who then knew everything about the applicant and how much money he could push them for. I'm not sure if anything was ever done about this. The investigation if memory serves focussed on Simply Mortgages. Were other brokers investigated by the authorities? 

The Data Protection Comissioner has a piece on it but no follow up on any investigation - [broken link removed]

Not being in the legal trade I'm not sure if any crime was committed, but perhaps you could post your thoughts? 

Firefly


----------



## Chris

I've read this thread with great interest, and waited a while to post as I wanted to see if one question, repeatedly asked by Fergus and others, would actually get answered: "What crime was actually committed?" So far I have not seen a single person point to something tangible.

People on here and in the media and public are constantly calling for someone to go to jail, and this is pure mob mentality. That is precisely why we live in a republic and not a democracy. Yes, we have democratic elections, but we are ruled by laws, under a republican constitution, and not by people and their opinions and wishes. Even if you held a referendum and more than 50% of voters said that bankers should go to jail that does not mean this would be righteous, correct, legal or appropriate. Imagine if a large enough group of people decided that all architects that drew up plans during the boom should go to jail for their part in the bubble, would that sound like a good plan?

Now I am not saying that banks and their staff should not be investigated for any laws that may have been broken, but I simply do not believe that there was any crime involved in their actions.

The reason I believe that we will not see laws introduced about banks blowing bubbles with cheap money and poor lending policies, is because this would mean following through with prosecutions. And that would mean all banks, including and especially the ECB, would be open to prosecution. All blame is constantly pointed at banks for lending too much, at too low standards, and at too low rates. But this was only made possible by more money being injected into the system. From January 1999 to the summer of 2007 the ECB increased the base money supply by a staggering 247%. So if you were to start prosecuting someone for creating the bubble then you would have to start at the top.


----------



## csirl

> "What crime was actually committed?"


 
From the dictionary:

*"Treason* is any attempt to overthrow the government or* impair the well-being of a state to which one owes allegiance;* "

Most people think of treason as being violent, but it does not have to be.

A lot people who are guilty of treason think there is nothing wrong with what they are doing. They often belong to certain political movements or have political views which are different to their government. They usually genuinely believe that their actions are for the common good. The fact that they are not aware they are doing wrong or are misguided does not mean they are not guilty of the crime.

We know and can prove beyond reasonable doubt that the actions which caused the current climate have, in fact, impaired the well being of the State. Therefore you would think that successfully identifying the individuals who participated in the crisis would be sufficient to guarantee a criminal conviction.


----------



## onq

FERGUS O'ROU said:


> 1. You have some sane debating points for the proposition that Irish bankers actively engineered the crash ?
> 2. Who is denying that they acted unprofessionally ?
> 3. Not being able to act in their own self-interest tends to negate criminality, though, no ?



@ Fergus,

1. There is a point beyond negligence where anyone who has suffered a wrong has to ask "was this an accident or was this intentional"? Its a reasonable question. I have seen the 1970's oil recession as well as two great boom and bust cycles in my life, the 1992 Office bubble in Dublin and the 2000 Dot Com bubble. People made money in all three. They made money on both the rise and on the fall in the markets. Greed, the usual motive, is present, so your question centres on means and opportunity. I won't digress here.

This is not a theoretical statement. With the opportunities in the market afforded by CDS instruments, you can make money on anything. Assuming you know its going to happen within a certain time. Look at the price of Gold at the moment. So yes, sane argument. "Insane argument" after all, is mere propaganda. Sounds great, doesn't stack up.

2. Is any banker admitting that they acted unprofessionally? Apart from one or two having been shamed into apologizing to their shareholders, have you seen any public demonstrations of acknowledgment of responsibility, never mind atonement, for the disaster we're in? Have you seen any of their outrageous bonuses (bonuses for what, I ask you?)being donated to the St. Vincent de Paul who are looking at upward of €10 Million a year to support formerly well off families now struggling to pay their debts and put food on the table? No, Fergus, you aren't.

These smug fellows are a breed apart in terms of arrogance and ignorance, living off undeserved levsl of salaries that should have been stripped from them the day they were discovered lying to the government about the extent of the damage they had presided over.

And please don't tell me they were bound by a contract to be paid those amounts. Any contract properly written has penalty clauses where an employee has acted criminally or fraudulently. If those clauses didn't exit, that's supporting evidence for a culture of criminality within the organization.

3. Criminals can be shown not to act in their own self interest as a matter or course. Just look at their own career paths. Even where they are successful, they have to flee the country of their birth, where most of their social support structures are. Even where international flight is not required, and depending on the harm they do to their local community, they may be shunned there.

Let's take the most obvious example in recent times. The "armed struggle" in Ireland wasn't finally defeated by political initiatives by Hume and Adams. Adams was looking for a way out. The struggle was lost when their support base realized the long term harm the struggle was doing to  community, in terms of growing protection rackets and criminality which were increasingly wrapped in the Green.  Without community support, a guerrilla force cannot survive. The little old ladies on the Falls Road defeated the IRA.

The fact that the principal actors are still ensconced in the banks is continuing to do us harm financially.
Why do you think the markets lost faith in us so much that we had to borrow from Europe?
Even Government guarantees couldn't put a gloss over the fact they had misled us.
There is evidence of the continuing flight of capital to foreign banks on AAM.

The middle classes have already rejected their banks.
The Banks refuse to take the necessary action.

Someone will have to do it for them.


----------



## Mpsox

No one is going to jail because, in all probability, no laws were clearly broken, or if they were, the offences concerned are deemed worthy of no more then a slap on the wrist. We can tie ourselves in knots trying to fit other legislation/common law to what happened but it's questionable if the DPP would try to get a conviction in a lot of cases. There may be trials for some of the "smaller" actions that individual bankers carried out on their own behalf but that will probably be it.

Real culprit here is light touch regulation. We've seen time and time again that if you give people an opportunity to do things with little or no consequences to themselves, then they will take advantage of that and try and exploit it. It happens, not just in banking, but in other areas as well, e.g. light touch regulation of the Church and in schools


----------



## Chris

csirl said:


> From the dictionary:
> 
> *"Treason* is any attempt to overthrow the government or* impair the well-being of a state to which one owes allegiance;* "
> 
> Most people think of treason as being violent, but it does not have to be.
> 
> A lot people who are guilty of treason think there is nothing wrong with what they are doing. They often belong to certain political movements or have political views which are different to their government. They usually genuinely believe that their actions are for the common good. The fact that they are not aware they are doing wrong or are misguided does not mean they are not guilty of the crime.
> 
> We know and can prove beyond reasonable doubt that the actions which caused the current climate have, in fact, impaired the well being of the State. Therefore you would think that successfully identifying the individuals who participated in the crisis would be sufficient to guarantee a criminal conviction.



But we do not take people to court based on dictionary definitions. People are taken to court based on the applicable law and for Ireland I would say that the treason act would have to be applied:
http://www.irishstatutebook.ie/1939/en/act/pub/0010/print.html



> WHEREAS it is provided by Article 39 of the Constitution that treason shall consist only in levying war against the State, on assisting any State or person or inciting or conspiring with any person to levy war against the State, or attempting by force of arms or other violent means to overthrow the organs of government, established by the Constitution, or taking part or being concerned in or inciting or conspiring with any person to make or to take part or be concerned in any such attempt:


I don't think you can argue that an act of war was committed against the state.



Mpsox said:


> No one is going to jail because, in all probability, no laws were clearly broken, or if they were, the offences concerned are deemed worthy of no more then a slap on the wrist. We can tie ourselves in knots trying to fit other legislation/common law to what happened but it's questionable if the DPP would try to get a conviction in a lot of cases. There may be trials for some of the "smaller" actions that individual bankers carried out on their own behalf but that will probably be it.
> 
> Real culprit here is light touch regulation. We've seen time and time again that if you give people an opportunity to do things with little or no consequences to themselves, then they will take advantage of that and try and exploit it. It happens, not just in banking, but in other areas as well, e.g. light touch regulation of the Church and in schools



I agree with your first point, but our problems do not stem from lack of regulation. The financial industry is the most heavily regulated industry. The reason the financial industry took too much risk was (a) because someone gave them *A LOT* of cheap money and (b) because they operated under the implicit and explicit guarantees that if something goes wrong they will be bailed out. Governments are still to blame, but not because of their lack of actions prior to the crisis, but because of their actions in this and previous crises.


----------



## Purple

ONQ, 
Greed, incompetence, playing the markets and getting “unjustified” salaries and bonuses are not criminal offences.

I’ve asked the question before if any of the main players could be charged with reckless trading. It seems that they can’t but I’ve never got a satisfactory answer as to why not. Other than that I can’t see where a crime has been committed.


----------



## FERGUS O'ROU

onq said:


> ... The coda to the contrary "I would like it if it did, though" seems misplaced given the previously expressed views.
> Here is the great divide that cannot be spanned, never mind crossed. "Bad lending" is the very definition of why the senior bankers should immediately fall on their swords... The collapse was the coda to a decade of incompetent management of the banks, with the disaster we face the proof of the pudding that they are in an ultimate sense incompetent. These were the people who accepted repackaged sub-prime loans as ASSETS (!) for goodness sake - or SAID they did, which I personally find hard to believe, which started the rot.
> What I find particularly galling about the current debate is that the proof is there, the dead body is on the floor, the casualties are round about amidst a great weeping and gnashing of teeth and your goodself and Brendan and a few others are standing around scratching your heads asking
> 
> "Was there a crime committed here?"
> 
> Unbelievable....



1. The coda was not misplaced. Your assumption that it was is yet another illustration of your inability to see that there is a difference with what one would like to be the case and what is the fact.

2. You say "Here is the great divide that cannot be spanned, never mind crossed.  "Bad lending" is the very definition of why the senior bankers should  immediately fall on their swords." 

I agree  - unless you mean that in a Bertiesque suicide sense. Those responsible should be held to account, but that need not mean jail.

3. "These were the people who accepted repackaged sub-prime loans as ASSETS (!) for goodness sake", you say.

Did they ? Chapter & verse, please.

4. In relation to your "dead body" nonsense, I refer you to my website and the example of the fatal collision.


----------



## FERGUS O'ROU

Firefly said:


> In 2006 there was a Prime Time report into how mortgage brokers were in cahoots with estate agents (often operating in the same building). The mortgage broker would determine the maximum mortgage that an applicant could get. This vital information was passed to the estate agent who then knew everything about the applicant and how much money he could push them for. I'm not sure if anything was ever done about this. The investigation if memory serves focussed on Simply Mortgages. Were other brokers investigated by the authorities?
> 
> The Data Protection Comissioner has a piece on it but no follow up on any investigation - [broken link removed]
> 
> Not being in the legal trade I'm not sure if any crime was committed, but perhaps you could post your thoughts?



I haven't heard of any criminal cases. I am aware that there are have been,  and still are, many cases against brokers for bad advice. I don't know how many have succeeded - quite a few have not though, because the consumer so obviously clearly intended to do "whatever it took" to get a mortgage.


----------



## FERGUS O'ROU

onq said:


> @ Fergus,
> 
> 1. There is a point beyond negligence where anyone who has suffered a wrong has to ask "was this an accident or was this intentional"? Its a reasonable question...
> 2. Is any banker admitting that they acted unprofessionally? ...
> 
> And please don't tell me they were bound by a contract to be paid those amounts. Any contract properly written has penalty clauses where an employee has acted criminally or fraudulently. If those clauses didn't exit, that's supporting evidence for a culture of criminality within the organization.
> 
> 3. ...The Banks refuse to take the necessary action.
> 
> Someone will have to do it for them.



1. It is a reasonable question. Get the evidence for the answer you are presuming, and I will pay it some attention.

2. Separate issue. Reasonable point, but I am not going to be distracted into that discussion now - it is irrelevant to the question of whether crimes were committed.

3. There appears to have been poor contract documentation all over the banks. You have a point there, but not as regards criminality. We own AIB: why are our elected representatives not investigating what you suggest ?


----------



## FERGUS O'ROU

This thread has become as interminable as my series of blog-posts !

I am going back to try to finish them. 

It's been fun but I may not be able to return. You know where to find me.


----------



## onq

FERGUS O'ROU said:


> 1. It is a reasonable question. Get the evidence for the answer you are presuming, and I will pay it some attention.


It was a rhetorical construction to rebut the question you asked - I am doubtful, not presuming, about the Irish banks ability to cause this. However I'm still pointing out that avenues of investigation shouldn't be dismissed out of hand. The logic of that approach has been disproved time and again. For example, the medical establishment once thought that the idea of a bacterium (H. Pylori) being a major cause of stomach ulcers was "insane" - but it turned out to be true, thereby vastly reducing the profits of people who made stomach medicines.


> 2. Separate issue. Reasonable point, but I am not going to be distracted into that discussion now - it is irrelevant to the question of whether crimes were committed.


Nope, its fairly central, because contracts without penalties for wrongdoing where the potential is vast are themselves prima fascie proof of poor governance. Poor governance was the root of all this, for those who cannot bring themselves to accept it was intentional.


> 3. There appears to have been poor contract documentation all over the banks. You have a point there, but not as regards criminality. We own AIB: why are our elected representatives not investigating what you suggest ?





Looking back over the Q & A's Fergus I think out answers are slipping out of sync, but I'll agree with you on this last point.

I'll venture to suggest that to do so might open up a series of vistas that those in power might find embarrassing and leave it at that.


----------



## onq

FERGUS O'ROU said:


> This thread has become as interminable as my series of blog-posts !
> 
> I am going back to try to finish them.
> 
> It's been fun but I may not be able to return. You know where to find me.



Likewise Fergus.

You're a worthy debater and I've enjoyed the exchange, even though like you I am moithered with other commitments just now.

I'll drop in to read your blog time permitting.

We might write some law. 


ONQ.


----------



## onq

csirl said:


> From the dictionary:
> 
> *"Treason* is any attempt to overthrow the government or* impair the well-being of a state to which one owes allegiance;* "
> 
> Most people think of treason as being violent, but it does not have to be.
> 
> A lot people who are guilty of treason think there is nothing wrong with what they are doing. They often belong to certain political movements or have political views which are different to their government. They usually genuinely believe that their actions are for the common good. The fact that they are not aware they are doing wrong or are misguided does not mean they are not guilty of the crime.
> 
> We know and can prove beyond reasonable doubt that the actions which caused the current climate have, in fact, impaired the well being of the State. Therefore you would think that successfully identifying the individuals who participated in the crisis would be sufficient to guarantee a criminal conviction.



Sweet post, csirl.

Sometimes we forget that monstrous crimes are already known by other names.

The irony is that I have been calling the banks behaviour "economic treason" for a while - and forgot about it! LOL!


----------



## Chris

onq said:


> Sweet post, csirl.
> 
> Sometimes we forget that monstrous crimes are already known by other names.
> 
> The irony is that I have been calling the banks behaviour "economic treason" for a while - and forgot about it! LOL!



But there is no law stating anything like economic treason, the Irish treason act solely states acts of war against the state as treason, and no such act was committed. 

Also imagine following situation. Back in 2005 at the peak of the boom, bankers would have done the opposite and started tightening lending because they thought things were getting out of hand. At that time politicians and the public were shouting for more tax breaks, incentives, reduced stamp duty, lower interest rates, higher multiples of earnings and so on. The sentiment at the time would very quickly have turned to calling banks evil perpetrators that are making it more difficult for people to own their own home and that such a move would be bad for the property market and the economy and therefore "economic treason". Banks did what banks do, and the *only* reason they were able to lend out the amounts they did at such low rates was because of the actions of the ECB and government. Start from the top down, not bottom up.


----------



## onq

Chris said:


> But there is no law stating anything like economic treason, the Irish treason act solely states acts of war against the state as treason, and no such act was committed.


_“All wars are economic in their origin”_. 

- BERNARD BARUCH, before Nye Committee, 9-13-1937 


> Also imagine following situation. Back in 2005 at the peak of the boom, bankers would have done the opposite and started tightening lending because they thought things were getting out of hand. At that time politicians and the public were shouting for more tax breaks, incentives, reduced stamp duty, lower interest rates, higher multiples of earnings and so on. The sentiment at the time would very quickly have turned to calling banks evil perpetrators that are making it more difficult for people to own their own home and that such a move would be bad for the property market and the economy and therefore "economic treason". Banks did what banks do, and the *only* reason they were able to lend out the amounts they did at such low rates was because of the actions of the ECB and government. Start from the top down, not bottom up.


The ECB is a Bank.

Thank your for pointing out its equivalence with a sovereign government.

_"When the Federal Reserve Act was passed,  the people of these United States did not perceive that a world banking  system was being set up here. A super-state controlled by international  bankers and industrialists...acting together to enslave the  world...Every effort has been made by the Fed to conceal its powers but  the truth is--the Fed has usurped the government."_

-- Congressman Louis McFadden, House Committee on Banking and Currency  Chairman (1920-31)

And thank you for pointing out that the government has dirty hands, although this can hardly come as a revelation to many AAM readers.

_“This [Federal Reserve] Act establishes the most gigantic trust on  earth. When the President signs this bill the invisible government by  the Monetary Power will be legalized...the worst legislative crime of  the ages is perpetrated by this banking and currency bill. The caucus  and party bosses have again operated and prevented the people from  getting the benefit of their own government.” _

-- CHARLES LINDBERGH, Sr.,  U.S. Congress

It seems government and the banks working hand in hand and supporting each other is nothing new.

And if only we had a few more Irish people uttering quotable quotes about the Irish banking system I wouldn't have to trawl American sources.


----------



## Firefly

onq said:


> And if only we had a few more Irish people uttering quotable quotes about the Irish banking system I wouldn't have to trawl American sources.



I think that's the point though...as nice as they sound, they're only quotes. As has been pointed out, a crime (as defined in law) needs to have been broken.


----------



## onq

Nope, as has been pointed out, this is a common law jurisdiction.
A criminal act, once its been defined, can become the subject of a law.
This may only needs a broadening of the interpretation of the law on treason.

It may lead to a new law on Economic Treason which may have international significance.
We have endless laws supporting the sharp end of contract, leasing and lending practices.
We need to balance this with laws that protect the electorate from the worst ravages of these.


----------



## Firefly

onq said:


> A criminal act, once its been defined, can become the subject of a law.
> This may only needs a broadening of the interpretation of the law on treason.



Well I'd be all on for that. Not sure I'd hold my breath for it though.


----------



## onq

You never know.

There seems to be a lot of people out there who are very teed off.

Including retired people with a lot of clout and members of the legal profession  and others whose pension funds were destroyed.


----------



## Monksfield

A most interesting diascussion.

The nearest we are going to get to any sanction for bankers is the Central Bank's fitness and probity assessments.

Despite their demonstrable incompetence,most particularly in relation to understanding and managing risk, my own guess is that not a single banker will be asked to step down.


----------



## Bronte

If you move money from one bank to another to falsify the balance sheet is that not a crime?


----------



## Ryandd

Even if a conviction for malpractice of the banking and financial regulation doesn't come about they should use their bonus to pay their defence lawyers to defend them when an independant body put the many questions to them that need to be asked.  I think for the tax payer that would be money well spent!


----------



## selfassessed

Brendan Burgess said:


> Rusnak, Millkin and Madoff did not cause the banking crisis. They were just plain fraudsters who were convicted and jailed.
> 
> We haven't had that scale of fraud in Ireland, but fraudsters have been jailed. They are less high profile, so they get less media attention.



Personally I don't see the parallel with these fraudsters so much.

I think a much closer analogy would be Jeff Skilling of Enron who is currently serving a 24-year sentence in the US.  He was convicted of conspiracy, making false statements to auditors and other charges.  Basically he committed securities fraud when he hid Enron debts off the balance sheet in a deliberate attempt to make the finances look better than they were to the stock market.  

Didn't Anglo do that too when "Mr Drumm’s non-disclosure of the loans to Mr FitzPatrick in Anglo’s financial statements; Mr Drumm’s role in relation to the transfer of billions of euro in loans between Anglo and Irish Life Permanent in 2008 to bolster Anglo’s books"?

So I don't understand how people say what was done wasn't illegal or shouldn't be a jailable offense or that the US does not give custodial sentences for this type of market manipulation.  And I certainly don't see whether or not this actually caused the banking crisis or not to be relevant - we should look at the crime on its merits.  It is a fraud that was committed that needs to be punished with a custodial sentence (IMHO).


----------



## DoctorEvil

selfassessed said:


> I think a much closer analogy would be Jeff Skilling of Enron who is currently serving a 24-year sentence in the US.  He was convicted of conspiracy, making false statements to auditors and other charges.  Basically he committed securities fraud when he hid Enron debts off the balance sheet in a deliberate attempt to make the finances look better than they were to the stock market.
> 
> Didn't Anglo do that too when "Mr Drumm’s non-disclosure of the loans to Mr FitzPatrick in Anglo’s financial statements; Mr Drumm’s role in relation to the transfer of billions of euro in loans between Anglo and Irish Life Permanent in 2008 to bolster Anglo’s books"?
> 
> So I don't understand how people say what was done wasn't illegal or shouldn't be a jailable offense or that the US does not give custodial sentences for this type of market manipulation.  And I certainly don't see whether or not this actually caused the banking crisis or not to be relevant - we should look at the crime on its merits.  It is a fraud that was committed that needs to be punished with a custodial sentence (IMHO).



Precisely plus there was the Golden Circle loans to buy shares to prop up the share price thereby falsifying the position of the bank which apparently isn't illegal in this country!


----------



## onq

Absolutely.

And while I see where a suggestion might arise that these shenanigans didn't directly cause the current crisis, these were the results of a systemic failure of regulation to adequately police the lending agencies and banks.

They were symptomatic of the underhanded sharp practice and negligence on the part of financial professionals which became synonymous with the Celtic Tiger and which DID lead directly to the current crisis.


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## Firefly

THE FORMER finance director of [broken link removed] has been arrested by fraud squad officers investigating financial irregularities at a bank.
William McAteer is being questioned by detectives from the [broken link removed] Bureau of   Fraud Investigation.

http://www.independent.ie/national-...inance-director-mcateer-arrested-2922064.html


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## onq

"_O frabjous day_! _Callooh_! _Callay_!"


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## bullworth

Firefly said:


> THE FORMER finance director of [broken link removed] has been arrested by fraud squad officers investigating financial irregularities at a bank.
> William McAteer is being questioned by detectives from the [broken link removed] Bureau of   Fraud Investigation.
> 
> http://www.independent.ie/national-...inance-director-mcateer-arrested-2922064.html




could be just a distraction from the fact that we gave Anglo bondholders a billion today. Bankers have been publicly arrested before and let go soon after.
Could be just Bread and Circuses for the masses.


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## RMCF

Is it not his 2nd time for questioning?

Nothing will come of it. I can guarantee one thing in the years to come, we will look back at all this and not one person will have done jail time because of it.

And in a country where people do time for not paying their TV licence.


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## Firefly

bullworth said:


> could be just a distraction from the fact that we gave Anglo bondholders a billion today. Bankers have been publicly arrested before and let go soon after.
> Could be just Bread and Circuses for the masses.



You could be right


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