This Is Not The First Time Banks Have Been Caught Red Handed!

The commission came up with recommendations that top banking officials should be held responsible for their actions and strict actions must be taken. The report highlighted that many top officials tend to think that they will not be punished as working in an environment with insufficient personal responsibility would not make any difference.

U.S. Story

 Elizabeth Warren, the senior United States Senator from Massachusetts made financial consumer protection her key election issue and launched the “21st Century Glass-Steagall Act of 2013” by joining hands with Republican John McCain, Cantwell, and King.

The bill was introduced with a motive reduce risks to the financial system by limiting banks’ accessibility to perform certain risky activities like investment banking etc. The objective of the act was breaking down the ‘too-big-to-fail’ banks by cutting off the dull operations of the banking system from the riskier functions of investment banking, private equity and hedge funds.

The bill gave five years time period to the financial institutions to transform their operations. The banks were unhappy with the fact that the big push back by the powerful banking lobby had already started.

The Bottom Line

There have been similar tales from all across the globe. Banks and financial institutions will not hesitate to use tricks in their books to debate attempts that tries to make them behave more dutifully and to get senior management to take accountability.

Halan writes, “I think the British report has the right idea - use incentives to get the banks and the financial sector to do the right thing.”

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