Why no one is going to jail for the banking crisis

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.
 
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.
 
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.
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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.
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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.
 
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?
 

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.
 
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.
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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.
 
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.
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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.
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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.
 

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"
 
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.
 

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.
 
FERGUS O'ROU said:
1. IMHO the loan warehousing had zero to do with the banking collapse.
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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.
 
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.
 

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.
 

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.
 
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.
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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 ?
 

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.
 

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" ?
 

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 ?
 
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