Banking Fines

[trendie]

EU fines banks over rate-rigging.

http://www.bbc.co.uk/news/business-25215560

How much money did they make through their activities?
Does the fine reflect this?

Shouldn't a fine be the same as the perceived gain, plus some extra?
Otherwise, a fine is just a calculated risk, knowing you could get away with it, maybe even come away with some of the gains, plus a slap on the wrist.

if you knew you would lose any gains, plus some, the incentive would diminish.

 

[Shakone]

EU fines banks over rate-rigging.

http://www.bbc.co.uk/news/business-25215560

How much money did they make through their activities?
Does the fine reflect this?

Shouldn't a fine be the same as the perceived gain, plus some extra?
Otherwise, a fine is just a calculated risk, knowing you could get away with it, maybe even come away with some of the gains, plus a slap on the wrist.

if you knew you would lose any gains, plus some, the incentive would diminish.

Don't think it would diminish the incentive, as an individual could still do this, get a massive bonus and then just move banks. What is the cost to the individual?

Also,

UBS and Barclays stood to pay the largest fines of 2.5bn euros and 690m euros, but avoided paying anything because they assisted the investigation.

is silly. So you can cheat, but as long as you help out the investigation then nothing lost.

All of these fines are a nonsense.

 

[trendie]

Don't think it would diminish the incentive, as an individual could still do this, get a massive bonus and then just move banks. What is the cost to the individual?

Also


Makes it all silly. So lets cheat, but then help out when we're found out and nothing lost.

But if you robbed a bank, made off with 100K.
Got caught, and was fined 30K, with maybe a short sentence.
You know you are 70K ahead.

If you rob a bank, the fine should be, at the very least, the amount you made off with, surely?

I mean, the PPI repayments are full refunds, plus interest.

 

[Shakone]

But if you robbed a bank, made off with 100K.
Got caught, and was fined 30K, with maybe a short sentence.
You know you are 70K ahead.

If you rob a bank, the fine should be, at the very least, the amount you made off with, surely?

I mean, the PPI repayments are full refunds, plus interest.

Yeah I agree with you. But these fines are stupid anyway. They're not about fining appropriately (as you point out), they're not about improving the industry.

 

[Purple Brain]

All this spank the banks talk makes me so angry. Do you realise some banking executives are having to face this Christmas with a bonus of less than £5 million? Little Johnny's playhouse - in the Bahamas - is going on a back-burner for sure.

Walk a mile in their shoes and you'll find out just how tough things get when the regulators nibble.

 

[Martinghoul]

Over the years, they have made more money from these "activities" than the fines. However, there are other remedial aspects to this now that are quite punitive as well.

One other thing to mention is that this is the European regulator fines. UBS and Barclays have already settled with UK FCA and US CFTC.

 

[new_trader]

You're upset about the fines? I couldn't care less, the Government and the banks have an incestuous relationship. Fine them until they fail, then bail them out with taxpayer money...then fine them again...bail them out...etc.

This isn't Capitalism.

 

[kimo'sabby]

You're upset about the fines? I couldn't care less, the Government and the banks have an incestuous relationship. Fine them until they fail, then bail them out with taxpayer money...then fine them again...bail them out...etc.

This isn't Capitalism.

Haha. It is capitalism...at it's finest (incestual)

 

[Atilla]

Haha. It is capitalism...at it's finest (incestual)

I think it is natures law as perceived in all things around us...

There can only be one!

Start off with perfect competition, many players - competition leads to killing off the unsuccessful players.

Leads to oligopoly few large operators - game theory and self interest naturally leads to collusion to maximise gains rather than competing on price which reduces profits. There is competition on product differentiation but in stuff like oil where product differentiation has no place cartels or price leaders are established. Pretty much the same on interest rates; what is there to compete on other than the rate?

Leads to monopoly - natural law of competition, maximise profits. Buy out the competition or destroy it by below cost pricing and dumping in the short term etc.

Blue pill or red pill they both end up in the same destination. In fact fascism and communism are one and the same tyrannical systems where one purports to free market economics and the other social but they are tyrannies never the less as systems go. Billions of people out there and we become dependent on the whim of a handful of megalomaniacs.

Anyhow - there is capitalism for you without regulation.


Finally, I think capitalism is notional like god it doesn't really exist but load of assumptions that help explain what man perceives as a reasonable fit to make sense of its environment. Better to dispense with both imho.

 

[kimo'sabby]

I think it is natures law as perceived in all things around us...

There can only be one!

Start off with perfect competition, many players - competition leads to killing off the unsuccessful players.

Leads to oligopoly few large operators - game theory and self interest naturally leads to collusion to maximise gains rather than competing on price which reduces profits. There is competition on product differentiation but in stuff like oil where product differentiation has no place cartels or price leaders are established. Pretty much the same on interest rates; what is there to compete on other than the rate?

Leads to monopoly - natural law of competition, maximise profits. Buy out the competition or destroy it by below cost pricing and dumping in the short term etc.

Blue pill or red pill they both end up in the same destination. In fact fascism and communism are one and the same tyrannical systems where one purports to free market economics and the other social but they are tyrannies never the less as systems go. Billions of people out there and we become dependent on the whim of a handful of megalomaniacs.

Anyhow - there is capitalism for you without regulation.


Finally, I think capitalism is notional like god it doesn't really exist but load of assumptions that help explain what man perceives as a reasonable fit to make sense of its environment. Better to dispense with both imho.

What is the opposite of apex? Is it base?

 

[Atilla]

What is the opposite of apex? Is it base?

The opposite depends on your point of view!

How does obtuse grab you?

 

[kimo'sabby]

The opposite depends on your point of view!

How does obtuse grab you?

Christ all mighty, nothing ulterior, a genuine question.

 

[Atilla]

Christ all mighty, nothing ulterior, a genuine question.

I was being genuine :smart:

Told you what I thought. Googled it and something different.

Tell us more

 

[trendie]

You're upset about the fines? I couldn't care less, the Government and the banks have an incestuous relationship. Fine them until they fail, then bail them out with taxpayer money...then fine them again...bail them out...etc.

This isn't Capitalism.

I am not upset about the fines. My personal feelings don't count.

I was curious as to whether if the fine is small enough, and less than any gain from nefarious activities, with minimal censure, then illegal, or questionable activities can flourish if the resultant fine for being caught is less than the gain from such activities.

if you robbed banks, and knew what the fine was likely to be, you could plan a hiest, knowing that even if you got caught, you would be allowed to keep a certain amount of the loot.

If I didnt pay my tax on time, I am still liable for the full amount, plus interest, plus fines. The incentive isn't there.

However, I am aware that some people, having run up huge personal bills on cards, can negotiate reduced final offers, and write off the rest.
This kind of thing does my head in, as it penalises those who conduct their affairs correctly.

 

[new_trader]

I am not upset about the fines. My personal feelings don't count.

I was curious as to whether if the fine is small enough, and less than any gain from nefarious activities, with minimal censure, then illegal, or questionable activities can flourish if the resultant fine for being caught is less than the gain from such activities.

if you robbed banks, and knew what the fine was likely to be, you could plan a hiest, knowing that even if you got caught, you would be allowed to keep a certain amount of the loot.

If I didnt pay my tax on time, I am still liable for the full amount, plus interest, plus fines. The incentive isn't there.

However, I am aware that some people, having run up huge personal bills on cards, can negotiate reduced final offers, and write off the rest.
This kind of thing does my head in, as it penalises those who conduct their affairs correctly.

I understand what you are saying and I suppose I didn’t make my point very clear. Banks are a privileged group and as a result a moral hazard has been created. I see the fines and regulations as nothing more than an idiotic façade designed to placate an ill-informed public who are outraged by the bailouts that started 5 years ago. I suppose it’s meant to make us feel as if we are getting some sort of payback from the “greedy” bankers. I wouldn’t be using the banking fines as a premise for an argument on whether a fine is large enough to be a deterrent to an activity. We wouldn’t need any banking regulations if we had true free market banking. A lender of last resort? What utter nonsense!

 

[trendie]

I understand what you are saying and I suppose I didn’t make my point very clear. Banks are a privileged group and as a result a moral hazard has been created. I see the fines and regulations as nothing more than an idiotic façade designed to placate an ill-informed public who are outraged by the bailouts that started 5 years ago. I suppose it’s meant to make us feel as if we are getting some sort of payback from the “greedy” bankers. I wouldn’t be using the banking fines as a premise for an argument on whether a fine is large enough to be a deterrent to an activity. We wouldn’t need any banking regulations if we had true free market banking. A lender of last resort? What utter nonsense!

Reminds of the joke that if you borrowed a million from the bank, and couldn't repay it, you're in trouble.

If you borrowed 100 million from the bank and couldn't repay it, the banks in trouble!

I guess the equivalent would be that society's in trouble, via bailouts when they overreach.