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Are Bankers Rogues?

Are Bankers Rogues?

They are usually thoughtful, smart, alert and trustworthy; they know what they are talking about even if they make you sad by refusing to meet your requests. Such is the iconic image of bank managers etched on many peoples’ minds as they carry out their affairs with their bank.

So, now, it is official: bankers do engage in fraudulent activities, and many have even gone to jail recently in various trading countries for that reason, including, notably the United States of America and the United Kingdom. The latest saga to afflict a major bank in the latter is the scandal of manipulation and market abuse levelled at Barclays Bank, for which it has been fined a staggering £300m (N750bn) by the regulator.

During the 2007-9 period, at the height of the financial crisis, banks were worried about their balances, and so connived in submitting lower than usual borrowing rate for their calculations. They then went about lending in the open market at a lower rate than would have been possible under a serious financial constraint. That, in turn, affected the rates of return for major investors: pension funds, derivatives, mutual funds, adjustable mortgage rates, etc.

Barclays informed their staff, we are told, on a weekly basis, of the rates they were having to charge to clients and the rates at which Barclays was borrowing. According to an account of a whistle-blower in the London’s “Independent” newspaper of Saturday July 7th, Barclay’s chief executive, Bob Diamond, ran the show at the bank with the ruthlessness of a Julius Caesar. Senior staff were put on so much pressure to deliver on targets through the CEO’s policy of “escalation” i.e. anything that goes wrong in any department immediately gets escalated right up the chain of command in the bank, and if you do not, and later found out, you are booted out of the organisation.

Even here in Nigeria, banks offer eye-popping salaries to their executives in return for what amounts to the bank’s virtual takeover of their lives. They work to meet deadlines and targets always with one aim: increased margins. It is not surprising therefore, that many take excessive risks, with only a modicum of supervision.

In conclusion, yes, bankers also go rogue in the West, but with one notable difference; they invariably get caught sooner than later, charged to court, convicted and gaoled. With us though, a few rogue bankers are ever detected let alone caught; and on the rare occasion that they get charged to court, they get a derisory sentence, or worst, have the case dismissed for lack of evidence or diligent

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