A prediction. Since the LIBOR scandal merged into the money-laundering scandals merged into various mis-selling scandals it becomes increasingly clear that the compliance function in many a bank has become deeply, hopelessly compromised.
(We know how this happens: bullying bastards like Fred or Bob or Jim or big-swinging Dick make it quite clear they don’t wish to hear from risk-managers or financial controllers or auditors or compliance officers because They Are All Nay-Sayers, bent on disrupting the pure flow of commercial genius and the rich personal rewards it deserves. Said controllers generally know what is going on; but they are only human, and fairly well paid to find creative ways of turning the blind eye – indeed, sometimes even joining in with the great game of fleecing everyone in reach.)
Now: here’s the prediction. In the absence of an effective compliance framework, quotidian rule-bending for financial gain must inevitably sometimes have merged seamlessly into serious, purposeful, creative crime. I predict that some really substantial outright thefts and frauds by bankers will be revealed in the coming months.
I don’t mean big losses racked up by ‘rogue traders’, or lazy haircuts inflicted on pension-funds, or laundering the shady revenues of Mr Unscrupulopoulos – all of which are bad and costly enough. No, I mean naked billion-dollar thefts. By bankers. Like what Andy Fastow did in Enron – but magnified in proportion to the vastly greater means a bent banker has at his disposal when Compliance has become accustomed to looking the other way.
The shocking thing is that in the UK, for the last 5 years (another Balls-Brownite innovation) the ill-informed and under-resourced Inspector Knacker has officially stepped back from involvement in cases of fraud by banking staff, whose employers are generally able to avoid criminal investigations provided they compensate customers in full. Not good enough.
Watch, and shoot. Watch, and shoot.