The news breaks today that a 'rogue trader' has lost UBS something like £1.3 billion. I'm guessing it won't be found down the back of the sofa. But explain something to me. We have had a number of witch-hunts to find those responsible in a number of cases like this, not least Nick Leeson, with a lot of damage done and in the case of Barings the demise of an old, established bank.
But haven't we just had a whole raft of bank 'failures'? Only not quite failures as that was not allowed to happen, they being bailed out with taxpayers cash instead. And these problems, were they not caused by deals that were somewhat shady? Mortgages sold that were cheap at the start but when the full rate kicked in the repayments would be too high. When these were bundled, and sold on it was an admission that they knew of the toxicity.
Yet, and please correct me if I am wrong here, no-one has been arrested? It was a system failure we are told, there is no one to blame. For me the analogy is this. If you go into a bank and run off with £100 you are a crook, but if you mastermind a very clever theft involving millions of pounds and with great sophistication, then it becomes a 'system' and no-one is guilty of wrong doing. Is that how it works? Or only if the system is called banking? Do politicians not pursue such people because they operate in such a similar way themselves?
I love the outrage with which senior bankers vent at people like Leeson, whilst being a) not so different themselves and b) more than happy when illegal trades work out fine. But most importantly, they clearly have systems in place that allow these things to go on. If you genuinely do not want something to happen you put careful checks in place, but with banks and their trading (more correctly, gambling) they seem to carefully ensure the checks are absent. Why would that be?
It is like the whole corrupt business of banking. For decades current account banking was free. We knew they used our money to make themselves money and the slight service we were offered was the pay off. Then, with the advent of electronic transfers that made their job easier and cheaper, they introduced charges. These appeared because with the electronic age you had to have a bank account and you couldn't move without using electronic transfer.
With a grip on the throat of the money-go-round banks could blithely behave however they pleased. Not that they were a cartel you understand. In the same way the Kray brothers weren't criminals. Having been slapped for that, they then began over charging for the things they could and mis-selling loan insurance. In fact, either banking is extremely accident prone or they set out to conduct these underhand tactics because they know people have little option.
And then their was the ultimate sophistication of 'credit default swaps' and their family. So sophisticated the bosses didn't have a clue what was going on. They just nod when someone says, 'this will make us a lot of money'.
As Sarah Palin said recently, how often do you see people enter politics with modest means and leave very rich? The answer is of course, all the time, though not always as seriously as Blair and Mandleson, nor often with so little 'audit trail'. So the people we elect to watch over people like the bankers are in receipt of cash and sinecures from these people. Just why do banks and big companies find talentless politicians so attractive to have on their boards? Are these things connected and do they inevitably lead to madness like banks going bust? While we get all excited about a 'rogue trader'.
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