Tony’s News Roundup

Tony’s News Roundup

This is definitely not John Craven’s Newsround - this is altogether more idiosyncratic as I comment on news stories which have caught my eye!

Mixed Messages from Jeremy Corbyn

According to the BBC, “Labour leader Jeremy Corbyn is to call for an end to the "trench warfare" in the party and for it to unite to fight a potentially early general election.In his close of conference speech, Mr Corbyn will say his party must "rebuild trust" following months of internal strife, and prepare itself for power.” (BBC News)

But in the meantime, at the party conference, Labour MPS have been forced to run a gauntlet of hard-left activists calling them “traitors” and demanding that they were deselected because of their opposition to Jeremy Corbyn. Leaflets are handed out by activists who say openly that “Most constituency members are itching to see the back of traitor MPs.”

The right of the party has seen the return of the threat of deleselection, and rather than stand up to this threat as part of the “trench warfare” he calls for an end of, Jeremy Corbyn has persistently refused to speak out against deselections in the wake of his leadership victory on Saturday.

Instead he has presented the change in constituency boundaries as an opportunity for reconsidering every Labour MP’s position, a godsend to those activists:

“There would be a full selection process in every constituency but the sitting MP … would have an opportunity to put their name forward... So there will be a full and open selection process for every constituency Labour party through the whole of the UK.”

In Thursday’s speech, Mr Corbyn promised to tackle the “five ills of 21st century Britain”: inequality, neglect, prejudice, insecurity and discrimination. But there is clearly prejudice, insecurity and discrimination within his own party, and it is Corbyn’s own supporters who are fermenting this.

Banks: how bonuses incentivise corruption.

The US' biggest bank Wells Fargo has been fined $185m for illegally opening accounts to boost sales targets. The cash will go to regulators while the bank will also hand back $5m to customers. Employees also issued debit cards without customers' knowledge, even creating fake email addresses to unknowingly sign up consumers to online-banking services, the regulator said. Wells Fargo has fired more than 5,000 staff in response to the scandal. Wells Fargo chief executive John Stumpf will forfeit $41m (£31.5m) in bonuses as the bank tries to stem a scandal over its sales practices.

While UK Banks like Barclays and HSBC have been facing heavy fines for corruption, it seems that American banks are not immune to corrupt practices. Bankers bonuses, it is clear, do not just give incentives to performances, but also create an ethos in which morality takes second place to money.

In this case, taking on board more customers was key to winning big bonuses, so consumers were signed up without their knowledge or consent to online banking services and given debit cards. Where emails were not known, fake emails were created. The figures looked good: the customer base was growing and increasingly signed up to online services. But it was all a sham.

Until the issue of bankers bonuses is tackled firmly, there is always going to be the risk of cutting corners. And the only way to do this is not by removing bankers bonuses, but ensuring clear lines of responsibility, so that those responsible for criminal activity, or those who failed to supervise adequately face appropriate criminal charges. Fines against a bank achieve nothing, but fining individuals or even sending them to prison would send out a stark message.

Of course there is always the danger that lesser individuals will be counted as “rogue traders” and sacrificed to maintain the CEOs in the lifestyle to which they have become accustomed.

And Cornelius Hurley, director of the Boston University Centre for Finance, Law & Policy.comments that: "It used to be that the fear of a criminal penalty was you might lose your banking licence. That it would be a death knell. That's been removed - nobody has lost their licence," he adds. "Somehow there has to be a fear factor."

Top executives at the so-called "too big to fail" banks have mostly avoided any criminal charges, outside of Iceland, even as their banks paid tens of billions of dollars in fines to settle charges of wrong doing leading up to the financial crisis. That, of course, was paid with shareholders’ money! This is not the same as bringing alleged wrongdoers to justice.

As William Cohan remarked: for financiers, justice is just a cheque someone else has to write.