The fine imposed upon JP Morgan for hiding billions of pounds in losses in the “London Whale” trading scandal is nothing more than a slap on the wrist for serious criminality (your report, 20 September). The fine of £572 million is a drop in the ocean as the bank made profits of £12 billion last year. The settlement had no admission of wrongdoing by the bank and made deliberate fraud and lying by top executives look like innocent accounting errors.
Last year, HSBC, which admitted laundering billions of dollars for Mexican and Colombian drug cartels, settled with the US justice department for a token fine of less than $2bn. That same year, the involvement of leading banks in the rigging of the Libor (London inter-banking lending rate) was exposed. Libor underpins trillions in loans and financial contracts, meaning that hundreds of millions of people were effectively defrauded. Once again, those involved got off with paltry fines and just a few resignations.
The government has done nothing to clamp down on the rampant financial fraud going on today within the banking sector. Yet just last week the government said it was going to jail those committing benefit fraud for up to ten years, despite this only accounting for 1 per cent of all benefit spending.
The function of government, it seems, is not to prosecute and jail financial speculators, but to cover up and facilitate their criminality.