Another Royal Commission

The public bank bollocking known as the Royal Commission into What A Pack of Thieving Dishonest Bastards the Financial Industry Are rolls on with representative after representative of our most hallowed financial institutions taking the stand to essentially agree that yes, they were dishonest at worst and gob smackingly incompetent at best and that yes, they had essentially prioritised their own profits over their customer's interests because, well duh!

Along the way all the usual people are making all of the usual noises.  The Labor party is crowing delightedly while secretly being glad that all this didn't come to light when they were in office.  The Coalition is stuck between jumping enthusiastically on the bandwagon to cover their initial objection to the Commission and a mulish refusal to acknowledge that they'd opposed the thing at all while all of the media commentators are tut tutting while watching the revenue from their royal commission articles skyrocket.  People are shocked, shocked I tell you.

Why?  I'm not shocked.  I'm not even particularly surprised.  I can't say that I knew specifics of any of the dubious, immoral, dishonest and possibly downright criminal activity the finance industry was getting up to but the fact that they were doing it doesn't surprise me at all.  It isn't (I think) that I have a low opinion of humanity generally or the denizens of the financial services industry in particular.  I just asked myself two simple questions.  Will actions of this sort generate more income for their employer (and ultimately themselves)? and Is the likelihood of getting caught, or being punished in any appreciable way if they are caught, low?  If the answer to both those questions is "yes" then you can be pretty sure they're doing it.  As a general rule human beings do whatever they think they can get away with.

So what punishments will be levied upon the guilty wretches who have so thoroughly abused the public trust?  You're watching it really.  This public shaming is essentially their punishment.  Oh, a few people have had to resign, no doubt some fines will be levied and probably there will be some more regulations for our overstretched and underfunded regulators to pretend to enforce.  The resignees will get other jobs in the industry, the fines will be paid, the regulations will be ignored or circumvented and everybody will get on with business as usual until the next royal commission.

A question which has been raised a number of times in various media outlets has been "how can so many people of high personal integrity have turned out to be so dodgy in their professional lives"?  Leaving aside the fact that if they're dodgy in their professional lives then they don't have high personal integrity the answer is twofold.  Firstly where there is money there will be thieves.  A cliché but like most clichés grounded in truth.  Secondly and more importantly, the people running these major financial institutions have only the vaguest idea of what they're doing.  This isn't terribly surprising, our captains of industry aren't necessarily any brighter than the average man on the street.  They're better educated and they should have some experience but a vast sprawling financial services company (or any large enterprise) has so much going on that it would take a workaholic genius to be on top of all of it.

Basically the job of the board is to tell those under them to make money.  If those under them do that then the board is considered successful.  It probably also helps if the board doesn't ask too many questions about how that money is made.  Questions like that, if answered, might reduce the amount of money being made and suddenly the board would appear less successful.  Nobody wants to appear unsuccessful, particularly when that might impact your ability to get more board positions.

So what can be done?  Here's a bright idea that will go nowhere.  When I was studying money laundering (trying to combat it, not undertake it) I learnt that the thing drug dealers disliked most was not going to gaol.  Of course they didn't like that but what they hated most was having their assets confiscated.  They had worked hard and taken serious risks to amass that wealth and losing it (particularly when they went to gaol as well) really bit them.  In the financial industry making money is what people do.  Take away their money and they'll just make more.

So my suggestion; scrap prison sentences for drug dealers in favour of asset confiscation and I don't mean "proceeds of crime" I mean file the gold fillings out of their grandparents mouths and leave the entire family naked in the streets.  Lets see how many drug dealers can put up with their trophy wives bitching about having to live in a cardboard box.  For financial criminals, I wouldn't even yank their licences, just send them to prison.  They can pick up their careers when they get out.  In times to come perhaps a stint or two in Lithgow or Goulburn correctional centres will be a must have on a financial advisors CV.  At the very least it might help an over stretched and not over bright board decide who to hire.