WHEN the governor of the Bank of England says in a public speech, even if it is on the other side of the world, that it is time to think about clawing back the basic salaries of bankers and not just their bonuses when malpractice is proven, then you know that the problems of cheating and deceit within the business are even more serious than is obvious from the fines being handed out.
Fortunately, Mark Carney’s speech also shows the authorities are taking it extremely seriously and are prepared to step up the penalties for wrong-doing within the banking sector.
It seems it was the latest fines for manipulating foreign currency exchange markets – six banks were fined a whopping total of £2 billion – which has particularly shocked Mr Carney. The rigging of the market, which boosted bank revenues and profits and therefore the pay of the offenders, continued for five years after the financial crisis.
Even worse, it continued after banks had been fined for other malpractices. These included not just the mis-selling of credit payment protection insurance, but also the same market-rigging of the inter-bank lending rate known as Libor. Clearly, the foreign exchange dealers knew what they were doing was wrong, but they carried on doing it anyway.
That is presumably because they thought the rewards they would get – big bonuses on top of already fat salaries – far exceeded the risks of detection and the financial penalties that would follow. As Mr Carney remarked, this is no longer attributable solely to a few bad apples; there is evidently something wrong with the barrel containing them.
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Bitter experience has taught that simply clawing back bonuses, while it might please the public to a certain extent, is not a long-term solution. Traders and the bankers who employ them simply shift the rewards by inflating basic salaries and the malpractice problems persist. Hence Mr Carney’s suggestion.
But even this may not be enough. It seems to have dawned on some senior banking executives that the public see these malpractices as straightforward theft. Criminal charges and jail sentences for the guilty ought to be part of the standard process in these cases. Enough evidence has also emerged to suggest that senior executives are all too willing to turn a blind eye to these activities because they know that they can produce bigger profits and bonuses for them too. This is where the barrel is as rotten as the apples.
Thus it would be absolutely right for these high-level managers to be fined not just their bonuses but their salaries as well. In the worst cases, they, too, should fear criminal proceedings.
Banks and the people who run them hold a special position of trust in their responsibility for making credit available to assist economic growth. It is therefore right that they should be subject to especially severe penalties if they abuse that trust.
Primary health care means good food
IN A country where bad nutrition causes much ill health, resulting in people needing hospital treatment, it is a grim irony that, all too often, the food given to them in hospital does not meet nutritional standards. So the move by health secretary Alex Neil to improve hospital food is not just welcome but long overdue.
Quite apart from proper nourishment being a part of the healing process, it is also a chance to educate patients who don’t fully understand either the importance of a balanced diet or what it looks like.
Of course, the quality of a meal is a subjective matter – different people have very different ideas of what constitutes a good meal. So there will always be complaints about hospital food; they will have been made since Florence Nightingale was doing her rounds on the wards.
Some thought has also to be given to the nurses and auxiliaries who help patients at mealtimes. Sometimes, getting a patient to eat anything – good or bland – is an achievement. This is often the case with elderly patients. Thought too should be given to whether making high-fat snacks and sugary fizzy drinks available from vending machines, snack bars or trollies is really a good idea. For some patients, they become a substitute for food at which they turn up their noses.
The move will have to be paid for and, at a time when NHS budgets are under pressure, this won’t be easy. But a national programme of providing proper nutrition and educating patients in dietary needs should be seen as preventative health care, which will save money if it leads towards less obesity and less gastrointestinal disease.
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