Why aren't bankers ever jailed?

Michelle McGagh
Bank stock
Bank stock

The husband of actress Emma Thompson has said he won't pay any tax until someone is jailed over the HSBC avoidance scandal. While his announcement was on the dramatic side, it raises the question: why are bankers never jailed?

The furore around HSBC is huge; it's the biggest banking leak we've ever seen and covers 30,000 accounts holding £78 billion in the Swiss branch of HSBC, pulling in high profile names from across the political and business spectrum.

And while it's terrible it's not the most terrible thing the banks have done. After all, while tax avoidance may throw up moral issues, it is actually legal.

Thompson's husband Greg Wise is right to be outraged but why wasn't there this kind of commotion around the rigging of Libor rates, wholesale and incentivised mis-selling of PPI or the mother of all catastrophes, the financial crisis?

It's terrible that just one person out of 1,100 names on the HSBC tax dodgers list has been prosecuted, but no-one was for throwing the country into recession, using complex financial instruments and back scratching to make a load of money, or even for flogging rubbish insurance to normal people.

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Who's to blame?

Part of the problem is culpability. Individuals in banks are essentially protected by the herd as blame can't be brought to the feet of one person if a whole arm within a bank is doing something wrong.

While many would say the managers are the most culpable for letting poor practices sit at the heart of their teams, it cannot actually be proved that they knew about it and therefore we end up with fines and slapped wrists rather than prosecutions.

Changes made post-crisis that lay blame with appointed individuals are supposed to change the way banks and bankers pay for their wrong doing and incentivise them to do a decent job instead of fiddling the system but these new rules haven't been put to the test yet.

The fact that HM Revenue & Customs reportedly knew about these offshore shenanigans for five years and didn't act, and maybe wouldn't have acted until the story was leaked, shows that the cogs are slow to turn when high profile individuals are involved.

When you hear stories about pensioners facing jail time for refusing to pay council tax then the fact the bankers essentially get away with so much is even more galling. The fact that they are continuing to get away with so much means that Wise's call for action will resonate with many.

Read more:
Reckless bankers could face jail

HSBC helped clients evade tax

Barclays bankers could face jail

Protesters Gather Ahead of Meeting to Quiz HSBC Bosses
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