An interesting article in the Businesszone today, about Labour’s business secretary saying, “Bankers who caused the financial crisis should be sent to prison” and quite right she is.
Chuka Umunna MP: Bankers should face jail for gross wrongdoing
Speaking during an event at the Level 39 startup accelerator in London’s Canary Wharf, Chuka Umunna said: “It seems to me that we will not rebuild trust with the public or affect a culture change in finance until custodial sentences are imposed on those guilty of criminal wrongdoing in [the] sector.
“It cannot be right that someone who seeks to cheat the benefits system out of a couple of hundred pounds may well be thrown into jail for doing so, but those who seek to rig the financial system and receive hundreds of thousands of pounds as a result never seem to suffer the same fate.
“Is not the prospect of jail for gross wrongdoing one of the best ways we can affect a culture change?”
To restore trust in the banking sector, Umunna said banks must be “made safe” and authorities should ensure that they are never again able to “bring down our entire economy”.
He added: “We need a banking system that better serves the real economy. This is not just a problem of the recent banking crisis. We have had a banking system that is too concentrated – with five banks serving nearly five million businesses – for some time.
“And with too little diversity of business models – where if one bank will lend you money they all will, and if one bank won’t, they all won’t.”
Umunna said the UK needs to introduce “a proper British Investment Bank” as well as a network of regional banks to lend to small companies.
Speaking after the MP, Andrew Bailey, deputy governor of the Bank of England, said: “It is a difficulty of the financial crisis that no formal action has been taken against the CEO of a major financial institution.
“It’s more than odd that action has been taken people lower down the chain but not at the top.”
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