Saturday, December 15, 2012

Beware the snake-oil salesmen saying that banks cannot be prosecuted!

Andrew Bailey, chief executive designate of the Prudential Regulation Authority, has admitted large banks had become too big to prosecute, raising 'very difficult questions' for regulators.

Beware these words, and know your false prophet! This is the start of a PR campaign to try and make us believe that things are changing in the world of the banking mafias! The new master of the regulatory sphere (the one replacing the 'toothless' FSA, as Her Majesty the Queen referred to it), wants us to believe that under his watch, things are going to be different.

He is reported as saying that '...the largest banks have become too big to prosecute because of the impact criminal charges would have on confidence in them...'

Well, I'm sorry, and please help me with this, but isn't that the whole fucking point!

Banks survive, presumably because they inspire confidence in their probity, their honesty and their transparency.

When you get a bank which admits, like HSBC has just done, that it is nothing more than a low-life money launderer for Mexican drug kingpins, and when it serves powerful vested interests to get round internationally-ratified sanctions against rogue nations, what possible benefit is achieved by trying to pretend that they cannot be prosecuted and charged with criminal offences?

Oh, excuse me, it might impact the confidence they enjoy? Whose confidence, their Mexican drug traffickers, their international sanctions breakers, their global tax evaders, or the ordinary, law-abiding clients who are entitled to assume that their bank will obey the laws imposed on them and will provide a safe place of deposit? Perhaps I am completely wrong and that these are the kind of clients whose confidence HSBC and the Bank of England and the FSA, and the Treasury, and Old Uncle Tom Cobbley and all, really want them to maintain!

They can't mean ordinary people, they have already proven that they don't give a toss about their retail clients. A member of bank group HSBC, was fined a record £1.1m fine for defrauding clients over PPI to its loan customers. PPI policies were designed to protect borrowers from interest payments should they, for example, lose their jobs. However, the Bank was found to have sold many PPI policies to people who would have been ineligible to claim in any event. So small were the pay-outs, it is believed that it kept as much as 80% of its premiums, making it one of the most lucrative forms of insurance for banks.

Of course, why didn't I realise it before, it is the criminals, the drug dealers, the fraudsters, the LIBOR manipulators, the global tax evaders that George Osborne is depending on to keep the City of London afloat! I mean, it is already too late for HSBC and Standard Chartered, and all the other scumbag banks who have admitted their part in committing ziga-gillon pounds worth of organised crime to try and pretend that they are really nice banks after all. They are what they have admitted they are, they are organised criminal enterprises, with a criminogenic culture, and it is only right that they should want to attract criminal clients, and we should not shrink from saying so.

To try and pussyfoot about with their designation, which is what Andrew Bailey is prescribing, is simply to become criminally complicit, in the erroneous belief that banks are above and beyond criticism and remediation.

Confidence, what bloody confidence can anyone have when they know their bank is an admitted criminal? When their money is deposited with a bank that breaks the criminal law at every possible opportunity, which cheats them at every turn, sells them fraudulent products, launders drug money, evades international sanctions, moves foreign oligarchs' tax evasion, safeguards the deposit accounts of Third World dictators and their families, then what is that confidence worth?

If you want to deal with people like that then go ahead, be my guest, and become tarred with the same brush. A man is known by the company he keeps.

I don't personally care if half the banks in London decide they can make more money by following these elevating examples, but if that's the case, then we had better stop pontificating to other nations on how to behave, we must stop agreeing to sanction foreign governments, we must stop throwing our weight around at the UN trying to provide a moral lead,  we must stop intervening in foreign flashpoints, because we no longer have any moral authority, and it is all getting very embarrassing!

This is the lesson that Governments and regulators and former Bank of England apparatchiks like Andrew Bailey never fucking learn. They are so puffed up with the sense of their own importance, they still think that it is possible to run a banking environment of which Lucky Luciano would have been proud, and still maintain their spurious claim to moral authority! Well, I've got news for them, you can't!

I have worked for a long time in the State Bank of Pakistan for the Asian Development Bank trying to develop and implement their Anti-Money Laundering rules and regulations, at the instigation of the FATF. When we lectured delegates about the importance of implementing procedures and processes which can interdict money laundering, the Pakistani bankers and businessmen just laughed and shook their heads ironically, and said; 'Why are you coming here to tell us what to do? We are laundering so much money into the UK, why don't you put your own house in order first before telling us how to run ours?

Does Andrew Bailey know about this, does Lord Adair (toothless) Turner, and if they don't, would they like to learn the facts about it? I doubt it very much! Would they like to understand how millions and millions of pounds worth of Pakistani drug money and the proceeds of other criminal enterprises, including the vast sums of money laundered out of Afghanistan for drug dealers and terrorists, enter the UK illegally every year and are used to purchase businesses and housing property in Manchester and Birmingham and the Metropolitan West Midlands more generally?

I seriously doubt they would want to know about it, and they wouldn't thank me if I told them! But they can't pretend to the bankers in Pakistan that Britain has any moral authority in this sphere, because they know better and they continue to move their money through British banks in Pakistan into British banks in Dubai and in the Gulf region, and on into London and New York, because they know that no-one wants to know!

You see, part of the problem for Andrew Bailey and his charming and cultured friends from the Bank of England and the Fundamentally (Toothless) Supine Apologists, is that they just don't understand how criminals work and think.

They come from an age when the London banks were run, in the way my US friend, the Head of Enforcement at the SEC once said; "...You British think that those people who are responsible for the management of other people's money are gentlemen, and you are shocked and surprised when you find out that the opposite is true..." (See Blog dated 12.12.2012)

For years, no-one ever questioned how the British banks were able to make so much money, and why they were always being held out as being so vital to British economic interests. They were run by gentlemen, who were jolly nice chaps, and they made a shed-load of money. What no-one bothered to understand, because no-one bothered to ask was 'how'?

The fact is that from time immemorial, London and its attendant series of compliant off-shore Protected Territories were able to provide complete security and secrecy for every crook, wide-boy, drug dealer, tax evader, foreign dictator, etc etc on the face of the globe, and at some stage, all that lovely money came through London.

The British couldn't have cared less how black the money was when it started out, because the British could wash it clean, for a price, naturally! After all, we had some of the best accountants and tax advisors in the world to help foreign tax evaders hide from their governments; we had an army of compliant lawyers who made a huge living out of providing tax-planning and tax-litigation advice to foreigners. We had law firms who specialised in buying up expensive houses in North London for wealthy foreigners who didn't like the political or the tax regimes in their home countries, and who wanted to purchase valuable real-estate; we provided some of the very best corporate formation agents with access to every jurisdiction in the world. We had banks some of whose specialist account managers existed to win, facilitate and manage the affairs of the worst and most violent dictators in the world, organising systems to help them salt away the money which had been sent in aid to their poverty-riven countries, and which the President for Life had just sequestered from the State Treasury. This was literally blood money, but we British didn't give a damn, as Bernie Cornfeld once said, 'It's only money, and money has no smell!'

We have lived for years on other people's criminal money and we have no intention of stopping now, we can't afford so to do. I have been criticised so many times by both city businessmen and members of the UK security services for making these observations, and I have been told so many times that Britain needs to provide these facilities, that I have to believe it is true!

Actually, it was the Roman Emperor Vespasian who first coined the phrase but as I doubt many bankers have ever heard of the great Emperor, but most of them will know Bernie Cornfeld, because they adopted most of his crooked methods, I use the Cornfeld example instead!

We have grown used over the years to the influx of this money, and frankly, if it were to be suddenly cut off for any reason, it would cause some significant difficulty to the British economy, which is why Andrew Bailey seems to think that really going hard against the banks and prosecuting them for their criminal misdeeds would be so dangerous. He's not thinking about criminal money, I doubt if such an unworthy thought had ever entered his patrician head. No, it's the thought of bringing down a bank that worries him!

In a variant of the “too big to fail” problem, Andrew Bailey, chief executive designate of the Prudential Regulation Authority, has said that bringing a legal action against a major financial institution raised “very difficult questions”. Some banks had grown too large to prosecute. “It would be a very destabilising issue. It’s another version of too important to fail,” he said,

This makes these criminal enterprises too big to jail in Andrew Bailey's opinion. Why? “Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment,” he said.

I am afraid that Andrew Bailey is going to prove to be another in a long line of regulators for whom doing nothing about anything is considered to be a positive option.  This has been the problem with the British way of Regulation since the beginning. The DTI were the most useless bunch of financial regulators known to man, and not for nothing did they become known as the Department of Timidity and Incompetence.

They used to ring up to make appointments before exercising their investigative powers, and then were shocked and surprised when they arrived at the appointed time to find that all too often, the criminals had flown. I used to think it was just plain stupidity, but I later found out that in many cases it was deliberate and that they hoped that the offices would be empty because it would save the embarrassment of having to do anything. Doing nothing was always preferable to doing something!

I have already written many times how the FSA refuses to prosecute those criminals who operate within its jurisdiction. Doing nothing means you don't get criticised!

So why do I say that Andrew Bailey is likely to follow this path? Read his own words.

Mr Bailey admits that having told (FSA) staff to get tougher on banks, it has been difficult to persuade them that a more subtle approach might work better, particularly given their concern at being blamed for not doing enough to prevent a failure.

“Not doing something is always regarded as brave,” he says.

In my experience, subtlety doesn't always work with men like Roberto Diamante, the Barclays former bankster di tutti banksters, and I doubt whether Fred 'the shred' Goodwin would have been very amenable to such an approach. It amuses me that Fred Goodwin already had a mafia-style nickname before he was outed as another bankster!

I have finally reached the stage where I truly fear that the Government and its senior servants know only too well, that the British banking system operates in the ways I have described. I fear that they truly believe that if they were to put too many barriers in the way of foreign criminal money and tax evasion entering the country, that it would cost this country dear. I believe that this is the only explanation which explains why the systems and controls implemented to prevent and forestall economic and financial crime, are so routinely flouted and ignored by those employed to provide their oversight. I have reached the stage that nothing short of a complete re-structuring of our banking and financial services industry, with banks being broken up into much smaller component parts, and with the emphasis on spiv financing being outlawed. with a proper group of trained and dedicated law enforcers in post to deal with criminal activity.

Of course, they tried this after the scandal of the South Sea Bubble in1720, outlawing criminogenic activities, banning the short-selling of stock and generally trying to clean up the system.

But to no avail. The chaps in the City ignored the new rules, like they had ignored the old rules, and everything went on just as before. Exactly as they will next year and the year after that, whatever Andrew Bailey may think!

1 comment:

AbogadoNZ said...

The pusillanimous approach of the regulators is typical. As you rightly put it they are merely doing Cameron and Osborne's bidding in order to keep the supply of dirty money flowing through London. It is not just them either. The Parliamentary Committee is just mere theatre to give re-assurance to the us 'prols' that 'they' are doing something. If HSBC et al are too big to fail at least the rest of us now have a choice and one we simply HAVE to take. Those of us that have no mortgage (of which, thankfully I am one) have to close our accounts and move to alternatives like credit unions. The public has to get control of the bureaucracy and this can only happen with protest, passive resistance and consumer boycott. We have to let our legislators and law enforcers know and understand that failure to charge/prosecute is not an option just as it isn't for ordinary everyday offences like RTAs, theft, assault and more. Once we lose our trust in law and the justice system we are one step closer to anarchy. If 'they' don't get that message, even in the face of the too big to fail mantra, then society is another step closer to systemic failure. We have to keep up the pressure and remove through the democratic process backed these thoroughly wet bastards like the Lib/Dem cabinet and that bunch of anti EU loonies to be replaced by those of us who don't lack the balls to deal with the situation. Appeasement is what we have now and it will end in tears.
Keep it up Rowan. Ashley