Toxic Financial Services Behaviour - More Radical Reform Definately Still Needed
Stephen Platt was a guest speaker at a The Institute For Global Financial Integrity in Luxembourg recently. He spoke about the role the international financial services industry has played in facilitating and laundering criminal funds and property.
Stephen has actually interacted with, studied and scrutinised the vulnerability of banks, brokerages, trust companies and investment funds to criminal abuse.
We now know, the finance industry has actually ‘enabled’ corruption; drug trafficking and terrorism as well as human trafficking, proliferation, piracy and tax evasion. This extreme and dangerous industry behaviour deeply correlates to the risk taking that toppled the global economy in 2008.
We should now be aware of measures that could be taken to prevent criminals compromising the legitimacy of the global financial system. The role of the traditional power house financial and offshore centres as well as the rapidly emerging international financial centres in the Middle East, Africa and Asia has been well publicised. Yet, following the crisis, sufficient steps have clearly not been taken to address these toxic behaviours in major financial services companies and further radical reform is still needed.
The financial services industry may have found its way back to prosperity but not to health, in the way it is conducted. Both the regulatory models and the government responses are fundamentally flawed along with AML legal enforcement and compliance. Unfortunately the financial sector still gets beneficial treatment (only basic understanding of finance is needed for a director to run a bank, for example, and no professional qualification or training is obligatory). Meritocracy systems either do not exist or are not good or prevalent but rather there is a kind of club instead. Individuals are not held to account, they are not sanctioned and there is no accountability.
Currently, penalties are not targeted at the decision makers either, but are imposed upon the institutions themselves who are sometimes barely dented. What is required is a system which penalises the decision makers (whether at board level or within key risk management and audit functions) as well as those individuals within an institution that are actually engaged in the wrong doing. Our governments need to be aware that without this there is no ‘fear’ of being judged and nothing will change. MFTSE Affairs Supports this view and hopes to work towards recognition of these necessary reforms We look forward to reading your comments and ideas.
