Controlling the monsters in our midst - Banks and responsibility

THE politicians who, in 2010, when Ireland and Greece faced a nuclear-winter economic collapse that was averted only by the intervention of the EU and IMF, decided that our best interests lay in accepting the reality of our situation and that working with the troika offered the best prospect of restoring some sort of stability to our economy have been vindicated.

Despite persistent goading from Greek and Spanish protesters, our politicians and trade unions did not take the bait; they played a long, hard game and today the fruits of that patient, difficult policy are evident. While the Greeks rioted and protested over even the slightest attempt at ending practices that, if they were not corrupt were indistinguishable from corruption, we accepted measures that had a profound impact on most people’s quality of life.

Today, Greece is again on the verge of collapse and is so desperate that some Greeks have suggested turning their back on the EU and asking Vladimir Putin’s Russia for the financial support they need to sustain even the most basic social functions. There can hardly be a starker example of desperate delusion in modern European history.

It is tragic that that country’s future, under its new government, seems to make a clash with the EU’s financial orthodoxy inevitable. The tragedy is deepened by the hard fact that an impoverished, supplicant nation — despite all its high-minded bluster — has so few options and so few influential allies. It must be hoped that the Greek prime minister, Alexis Tsipras, can find a way of resolving his country’s terrible but largely self-inflicted difficulties without threatening the wider European economy.

Meanwhile, though vindicated, those politicians — our last government and their successors — must again feel betrayed by another player in the collapse of 2007.

Yesterday’s news, even if it has been know in government and banking circles for some years, that the Swiss bank HSBC has held accounts that, in some cases, facilitated tax evasion for Irish account holders and some of the world’s most unsavoury regimes alike will reaffirm the widely held view that banking is a business unencumbered by ethics or anything as vague or touchy-feely as social responsibility.

The Revenue Commissioners have said that they do not have enough evidence to take a case against HSBC for aiding and abetting tax evasion but the authorities in France, Belgium, and Argentina are not so constrained. Once again, our ever-more questionable justice system is an impotent, powerless observer when it should be a fearless instigator.

HSBC, a bank that routinely records profits in the billions each quarter, has insisted that it is working to improve its standards. Whether that statement refers to efforts by the bank to improve the security and confidentiality it offers its international clients or how it promotes ethical behaviour is a matter for legitimate conjecture. Unfortunately this latest exposé of low standards in high places feeds into a familiar, almost unending dialogue.

Just last week, former financial regulator and University of Missouri law professor Bill Black, who specialises in white collar crime, was in Ireland to give evidence to our enfeebled banking inquiry.

To say he was scathing of our Constitution, our justice system, and our inability to have a meaningful inquiry into our banking collapse — one that might even have consequences for the liberty of some of the main players — and the subsequent guarantee would be understating the case dramatically. Prof Black went so far as to say that he was precluded by the Constitution from “testifying to the primary causes of the Irish banking crisis”.

Prof Black’s statements, the HSBC exposé, and the terrible plight of the Greek people — not to mention our own debt — reminds us all, in the most challenging way, that, almost a decade after bankers were at the centre of the greatest destruction of wealth since the Second World War, we, neither nationally nor internationally, are any closer to having the tools needed to regulate this monster in our midst. Yes, that is the sound of them laughing all the way to the bank.