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Do you think politics / money markets needs to be more accountable?
Given we have had to bail out the banks at a huge cost to us the tax payer do you believe it is time we who vote in politicians should force them to impose hefty fines and take back the bonuses money men have earned and now asked us (twice over) to pay for? what would you like to see done to ensure this doesn't happen ever again?
Supplement from 11/03/2008 11:44am:
It would appear that those who have lost us our money are nothing more than another version of a bookmaker (turf accountant) who is also the 'gambler' except it is not his money he stands to loose - it's ours. What's more the really big players have huge assets to back them - super bookmakers if you like - anyone who can take a 'book debt' of sub-prime loans and mortgages and re-sell them as investments has not only a streak of genius in them but also a serious mental health problem if they thought they could get away with it - now is the time to write to your MP and complain and call for the contracts of the head of the banks to be canceled and put on pikes at the tower of London (P45 and contracts only)- what they have done to us financially is nothing short of TREASON and deserve a term in prison. - how would you feel if that were to actually happen?

asked in politics, economics, money

hellis852 answers:

Those that cause the crashes should be accountable to finding the funds not joe bloggs.Yes there should be in place clauses that if the said bank or company fails then the shareholders should not get paid and who helped to make the mistake then should be fined and not allowed to be in a job of trust. Do think the stock market boys go mad with our money by playing the stock market. OK saying we are doing well then the next year we end up paying double. They should not be given the fat wages some of it should be put aside for the bad years so that the culprits can pay for their mistakes.

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vultan answers:

There's been a lot of deregulation in recent years, by Bush and Blair/Brown (and before them). I wouldn't suggest rolling back to a pre-Thatcher/Big Bang state of affairs, but reimposing some limits on how banks lend would certainly seem to be a good idea. For starters.

I think hellis has identified a major problem, which is that bankers/brokers are reckless because there's no punishment for them if they seriously mess up. A limit on bonuses might help (I think they have something like that in Germany, although I might be wrong). But closer scrutiny on how individuals within organisations behave would be a big plus. Government-appointed auditors of some kind could monitor bank's behaviours closely - and they could perhaps be paid for out of the bonuses that are no longer going to the bankers, so the taxpayer doesn't foot the bill.

At least with politicians we get to vote them out of office if they do badly, even if their replacements are basically the same (just 18 more months, Mr Brown!). There is no way at present to punish businessmen who destroy the economy.

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rasputin1309 answers:

Yes - on a related point how refreshing to see the controller of Radio 2 resign over the Ross/Brand debacle. Not for her any of the usual wriggling by politicians to worm out of resigning - the usual "We're responsible for policy not implementation" OR "I've got us into this mess and it would be irresponsible of me to leave without clearing it up" - a nice clear and honourable resignation - if only the arses who got us into this mess took a similar path.

Supplement from 11/01/2008 08:25pm:

It is no surprise what Banker rhymes with is it

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wumpus answers:

Politics : most definitely.

And here I don't just mean the policy-makers that we elect.

Whitehall (i.e. the Sir Humphreys) who actually carry out that policy also need to be made accountable for their actions.

Banks : possibly.

Spanish banks have not fared particularly badly during this crisis, because their government imposed rules on the type of investments they could make. They have no exposure to US sub-prime mortgages.

Clearly better regulation would have helped.

So would better scrutiny from the people who were supposed to be watching the banks in the first place; the FSA and Treasury.

Which brings us back to the politicians again - it was Gordon Brown who instigated the whole concept of Tripartite Authority, expecting them to work together without clearly allocating the duties of each.

Cash bonuses for bank bosses are a bit of a red herring.
If the boss can't take cash, he'll just take shares in the bank instead.
Following the injection of government aid (which was what stopped them getting cash) the shares should increase significantly more than their issue value and actually represent a bigger bonus than the cash would.

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martin.thomas answers:

The top bankers have a power that affects most people alive - but they are not grown up enough to handle it. Perhaps they should be forced to wear short trousers for a bit?
Certainly, their power should be reduced massively. Inspectors should be installed in the banks to report to the rest of us what is going on. Activities that tend to destabilise markets, just so that a few clever parasites can make a profit, should be banned.

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robinsamuels answers:

How many people who've looked at this question (and answered it?) were quite happy taking the profits from the banking industry? Dividends, shares and pension funds have all been highly rewarded by the banking sector's willingness to take risks. Only now when they lose money, we start to kick and scream.

If we want to regulate and punish, we first need to take a good hard look in the financial mirror, the same as we need to over the falling house prices!

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