Barclays bankers could face jail

Bankers who rigged the Libor borrowing rate could face up to 10 years in jail. The Serious Fraud Office (SFO) admits that criminal proceedings could apply.

Its been a long time coming: last year the UK justice establishment sent many to prison following the riots - even for stealing bottles of water. But bankers who defrauded the whole country got off scot-free. So far.

Trainers vs Libor

Danielle Corns, 19, for example, was sentenced to 10 months in prison last November. Her crime? Stealing two left-footed trainers during the Wolverhampton riots. She didn't smash her way into a shop. She wasn't violent. She was just stupid.

Nicholas Robinson, 23, an electrical engineering student, was jailed for six months after pleading guilty to stealing bottles of water worth £3.50 from a Lidl store in Brixton. Robinson had no previous convictions.

There are many other examples. So the news that the Libor thieves could go to jail is welcome, and well overdue. Now we need to apply this justice across the banking industry, and quickly. It will be very difficult, given the expertise needed to regulate banks and their employees. But a few long prison sentences - starting with Barclays - would be a start.

Go directly to jail?

Though the Libor rate has an unsexy name, it underpins just about all financial trades across the globe, from how much you pay on your mortgage to bond yields. City bankers rigged this rate so they could make money from trading against it, as well as hiding their own borrowing costs - and made considerable sums as a result.

Although City grandees like Bank of England governor Sir Mervyn King claims change of banking culture is needed in the UK, there has been little talk of jail terms for the Libor fraudsters who have ripped off state agencies, private institutions and taxpayers. Till now.

(Sir Mervyn King even told MPs recently that the Bank of England had no evidence that Libor was being rigged until very recently, despite worries about rate-rigging from the New York Fed back in 2008.)

Lack of proportion

Roll back to the August riots of last year. "I have the very strong sense," said Cameron at the time, "that the responsible majority of people in this country not only have that determination; they are crying out for their government to act upon it. And I can assure you, I will not be found wanting."

He wasn't. An average prison sentence of 14.2 months was four times the average jail term handed down by the courts for similar offences in 2010, according to Ministry of Justice figures. The loss of proportion, in some cases, was appalling.

Under the present government no banker has gone to jail following the global financial credit scam and Cameron has ducked away from launching a full and open independent enquiry into the Libor scandal.

The message? If you're a well-off City fraudster you won't go to jail. If you're a working class kid and you nick a pair of trainers, you may.

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