Bank Deposits

[cruiser2]

Just seen a news item which says 26 CEO bankers in Iceland have been jailed for over 70 years for fraud.
Yet not one in the UK or USA has even been taken to court for the fraud over here.

[Kaz]

No, and not likely to!

Defraud Social Security out of a few thousand and you can (quite rightly) expect to get prosecuted and possibly jailed - bankers can defraud millions and yet seem to be bomb-proof!

[TheOstrich]

I know one or two people who actually had lucky escapes over that Iceland bank collapse, and managed to get their cash back - but it was a nasty and worrying time.

[Suff]

The two cases are entirely different.

In Iceland the bankers ran up debts totalling 6 times the GDP of Iceland. They effectively destroyed all wealth and all pensions for everyone in the country.

To do that in the UK, the Banks would have had to run up £8.4 trillion of debt.

In fact the UK banks had to be bailed out to the tune of some £100bn.

In Iceland the act of the Bankers were, quite literally, akin to selling their entire country as indentured servitude for a quick buck. The equivalent in the UK was somewhat closer to Berings bank where a small subset of the bankers gambled heavily on lending money they did not have to people who might not pay it back.

Hardly the same.

The Icelandic government had to repudiate the banks debts. Basically making the country bankrupt. All Icelandic banks, accounts and cards were cancelled and every Icelandic citizen, wherever in the world, needed help from neighbouring Scandinavian embassies to pay their bills and get home.

You simply can't compare the two. The only comparison between the two acts were that they were financial services. It's not comparing apples with Oranges, it's comparing apples with a fruit cannery. The Icelandic actions were totally illegal in Icelandic law and those bankers faced the penalty. The actions of the UK bankers, whilst showing extremely bad judgement in most cases, were, in fact, legal. There is no law which says that the CEO of a company can't make a bad call and the company go under. However, those who were hurt might take civil action to get some satisfaction.

Those acts which were deemed illegal by the courts were prosecuted. Banks are companies. Companies can be run well or badly. If you give a company your money to hold, then you are somewhat responsible for finding out if the company is actually well enough run to make your money secure. Interestingly if your money was in either HSBC or Barclays it was totally secure. Of course they were giving the lowest return for your money.

The old adage holds true, if it's too good to be true (paying interest several % over the base rate), then it usually IS too good to be TRUE.

I absolutely and steadfastly refuse to be part of this "the bankers stole my money so they should go to jail" business. The truth is far, far, more complicated than that and the responsibility lies in all areas, not least the Government for not correctly regulating the banks. Gordon Brown, with his IR35 and raid on pensions, did more damage to more people in the UK than any amount of banking scandal. I'd rather see his head on a pole at the Tower of London, but apparently I'm in a minority of about half a million people and the rest appear to be partaking in the press' Pavlov experiment....

[Workingman]

So, the UK banking system only had to be bailed out for £100 bn because the spivs lent money knowing it would never be paid back?

Brilliant!

Weren't we lucky?

The whole system is rigged in favour of the chancers - those who want to make money from money. The vast majority of us only want to put our money, assets, where they are safe. We do not want to make £squillions on a deal.

It's mad, I know, but some of us do not want to be property billionaires.

[Suff]

No problem, put your money in the post office bank. You'll lose money, slowly, over time, as inflation will be higher than the return, but, no problem, it will be safe. Better, it will lose less than money under the mattress which loses money every day as inflation devalues it.

It is absolutely a risk reward calculation. The higher the reward, the higher the risk. Even I, who was only concerned with making money pre the crisis, not the return on that money, knew that the Icelandic bank rates were absolutely untenable. I knew that the mortgages were insane and I knew that people were lying about pretty much everything.

The crisis cost me a home in the UK and about £100,000 of equity and around £150,000 of earnings. I'm still not taking this whole "crucify the bankers" on board. I simply won't listen to it. There was a total breakdown of the entire system, governance as well as corporate responsibility. There is no point in hanging the bankers without also hanging the BOE, the financial watchdogs and the entire Treasury (including the chancellor), who were in government at the time.

The very least of it, in the UK, was the bankers.

I've been robbed of early retirement and forced into a low equity property market by those failures. I'm highly aggrieved but I have no truck at all with this blame the bankers culture. If we want to start punishing everyone, let's start at the top. When we get to the bankers at the bottom, perhaps the ire and revenge will be a little slaked....

It's not as if this was the first time that it had happened or that the BOE and the financial regulators had totally falied..... BCCI/Western Isles Council.....