Tags: Bair | bankers | penniless | jail

Former FDIC Chief Bair: Leave Scofflaw Bankers ‘Penniless or in Jail’

By    |   Wednesday, 25 Jul 2012 01:30 PM

Former FDIC Chairwoman Sheila Bair has a solution for how bankers convicted of misdeeds should be treated, and it’s much worse than letting them eat cake.

“Leaving these folks penniless or in jail would be more of a deterrent” than settlements with their institutions that cost the banks money but do nothing to the employees who broke the rules, she tells Forbes.

Fining the banks simply punishes shareholders rather than bankers, and does little to strengthen the financial industry, Bair says.

She compares the fining of banks to the 2002 collapse of Arthur Anderson after the Enron scandal. The final result was “increased concentration in the accounting industry,” she says.

Bair likes the fact that criminal charges may be on the way for bankers involved with the Libor manipulation. But it’s just a beginning, she says.

As for the banks, Bair says they would do well to simplify their legal structure in light of their multiple subsidiaries and overseas activity. She would like to see “intermediate boards” at the major banks to oversee various business units, particularly commercial banking.

When it comes to Libor, many experts, including CNBC commentator Larry Kudlow and Rochdale Securities analyst Dick Bove, point out that the bank collusion may have been good for the global economy and investors around the world.

That’s because the collusion helped keep interest rates down during the financial crisis of 2008, which in turn helped prevent an economic and financial collapse.




© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
241
2012-30-25
Wednesday, 25 Jul 2012 01:30 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved