balancing act

Reckless bankers must be punished

Published:

GORDON Brown put into words yesterday what many people have been thinking following the incredible events of the past few weeks which brought our financial systems to the verge of collapse.

The prime minister said that irresponsible bankers and speculators, who had put so many ordinary people at risk in this financial crisis, should be punished for their actions. Presumably, he means no more fat bonuses and obscene pay packets for those who helped create this mess and could do so in the future if they are not reined in.

There is nothing wrong in making a good profit in business and rewarding people who make this possible. In the world of share speculation and lending large amounts of money there is a crucial balancing act between seeking a healthy profit and maintaining sound judgment. Some would call it greed, of course, getting in the way of commonsense. As Mr Brown suggested yesterday, some banks bought bad debts from America without really knowing what they were acquiring.

That is how it all started and now we have reached a point where one country, Iceland, was warning yesterday that it faced national bankruptcy. It is not just the fault of banks; there are also the faceless speculators worldwide who can trigger a share collapse through strategic selling and the spreading of false information. These, too, have a lot to answer for and resemble a bunch of hyenas moving in for the kill.

The problem with any free market is that it also attracts any number of rogues and incompetents. The public want to see them dealt with vigorously rather than rewarded handsomely.