Will we see our bankers banged up?

Do not pass GO or collect £200,000.

After five years here it is: a parliamentary report recommending bad bankers go to jail. No more bonus restrictions, enforced regulation or deferred pay; its straight to jail for senior executives who let their banks fail. Do not pass GO or collect your £200 (thousand) bonus, etc...

But how realistic is this idea put forward by the optimistically entitled report, “Changing Banking for Good”?

After one year, hundreds of interviews and 161 hours of evidence heard by an Archbishop (Justin Welby), head of the Treasury select committee (Andrew Tyrie), five MPs and four peers, The Parliamentary Commission on Banking Standards has made a number of ethical, rather than financial, conclusions. Here are some highlights:  

Too many bankers, especially at the most senor levels, have operated in an environment with insufficient personal responsibility

 One of the most dismal features of the banking industry to emerge from our evidence was the striking limitation on the sense of personal responsibility and accountability of the leaders within the industry for the widespread failings and abuses over which they presided.

"Dismal", 2responsibility" and "accountability" are all words we want to hear, but how practical are they, really?

Firstly, Andrew Tyrie, chairman of the parliamentary review, said that a prison sentence would only occur if there was “has been taxpayer support for a bank.” With pressure building on the government to sell its shares of RBS and other bailed out banks, there will probably be no "taxpayer support" by the time this becomes policy (if at all).

Then there is Tyrie’s comparison of the banking failures to Murder on the Orient Express where “everyone had some small contribution on the deaths and nobody was responsible”. Basically, with or without Miss Marple, how will you ever prove who is responsible for a bank’s failure without putting the whole management away? Building legislation to castigate one individual for a whole bank’s malpractice is going to be very hard, if not almost impossible.    

Lastly, the Treasury will not want to throw bankers in the slammer. Simply, it’s bad for our image. As Philip Augar reminds us in today’s FT, London is a global-sized financial centre in a medium-sized economy poised between recovery and recession. The City therefore needs to hold on to its competitiveness and putting bankers away is not going to look good.

While all this is gloomy pessimism for banker bashers and the likes, all hope is not lost. Even if we don’t see bankers behind bars any time soon, the threat should suffice.

Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

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“We can’t do this again”: Labour conference reactions to Jeremy Corbyn’s second victory

Overjoyed members, determined allies and concerned MPs are divided on how to unite.

“I tell you what, I want to know who those 193,229 people are.” This was the reaction of one Labour member a few rows from the front of the stage, following the announcement of Jeremy Corbyn’s victory at the Labour party conference. She was referring to support received by his defeated contender, Owen Smith, who won 38.2 per cent of the vote (to Corbyn’s 61.8 per cent).

But it’s this focus on the leader’s critics – so vehement among many (and there are a lot of them) of his fans – that many politicians, of either side, who were watching his victory speech in the conference hall want to put an end to.

“It’s about unity and bringing us all together – I think that’s what has to come out of this,” says shadow cabinet member and MP for Edmonton Kate Osamor. “It shouldn’t be about the figures, and how many votes, and his percentage, because that will just cause more animosity.”

Osamor, who is supportive of Corbyn’s leadership, is not alone in urging her colleagues who resigned from the shadow cabinet to “remember the door is never shut”.

Shadow minister and member of Labour’s National Executive Committee (NEC) Jon Ashworth – not a Corbyn loyalist, but focusing on making the shadow cabinet work together – shares the sentiment.

Standing pensively in front of the now-empty stage, he tells me he backs shadow cabinet elections (though not for every post) – a change to party rules that has not yet been decided by the NEC. “[It] would be a good way of bringing people back,” he says. “I’ve been involved in discussions behind the scenes this week and I hope we can get some resolution on the issue.”

He adds: “Jeremy’s won, he has to recognise a number of people didn’t vote for him, so we’ve got to unite.”

The former Foreign Secretary Margaret Beckett, another MP on the NEC, is sitting in the audience, looking over some documents. She warns that “it’s impossible to tell” whether those who resigned from Corbyn’s shadow cabinet would be willing to return, and is concerned about talent being wasted.

“We have a lot of excellent people in the party; there are new people now in the shadow cabinet who have had a chance to show their mettle but you need experience as well as ability,” she says.

Beckett, who has urged Corbyn to stand down in the past, hopes “everybody’s listening” to his call for unity, but questions how that will be achieved.

“How much bad blood there is among people who were told that there was plotting [against Corbyn], it’s impossible to tell, but obviously that doesn’t make for a very good atmosphere,” she says. “But Jeremy says we’ll wipe the slate clean, so let’s hope everybody will wipe the slate clean.”

It doesn’t look that way yet. Socialist veteran Dennis Skinner is prowling around the party conference space outside the hall, barking with glee about Corbyn’s defeated foes. “He’s trebled the membership,” he cries. “A figure that Blair, Brown and Prescott could only dream about. On average there’s more than a thousand of them [new members] in every constituency. Right-wing members of the parliamentary Labour party need to get on board!”

A call that may go unheeded, with fervent Corbyn allies and critics alike already straying from the unity message. The shadow justice secretary Richard Burgon is reminding the PLP that, “Jeremy’s won by a bigger margin this time”, and telling journalists after the speech that he is “relaxed” about how the shadow cabinet is recruited (not a rallying cry for shadow cabinet elections).

“If Jeremy wants to hold out an olive branch to the PLP, work with MPs more closely, he has to look very seriously at that [shadow cabinet elections]; it’s gone to the NEC but no decision has been made,” says Louise Ellman, the Liverpool MP and transport committee chair who has been critical of Corbyn’s leadership. “That might not be the only way. I think he has to find a way of working with MPs, because we’re all elected by millions of people – the general public – and he seems to dismiss that.”

“If he sees it [his victory] as an endorsement of how he’s been operating up until now, the problems which led to the election being called will remain,” Ellman warns. “If we’re going to be a credible party of government, we’ve got to reach out to the general electorate. He didn’t say anything about that in his speech, but I hope that perhaps now he might feel more confident to be able to change direction.”

Corbyn may have called for cooperation, but his increased mandate (up from his last stonking victory with 59.5 per cent of the vote) is the starkest illustration yet of the gulf between his popularity in Parliament and among members.

The fact that one attempt at a ceasefire in the party’s civil war – by allowing MPs to vote for some shadow cabinet posts – is in contention suggests this gulf is in danger of increasing.

And then where could the party be this time next year? As Osamor warns: “We should not be looking at our differences, because when we do that, we end up thinking it’s a good thing to spend our summer having another contest. And we can’t. We can’t do this again.”

Anoosh Chakelian is deputy web editor at the New Statesman.