We're now into a new phase of banking Yesterday Standard Chartered paid the American authorities £500m for helping finance various terrorists and crime gangs, while HSBC paid £1.2bn to settle American accusations that they'd happily turned themselves into the accounting arm of the Mexican drug cartels. In both cases, the banks pay a fine and escape without any criminal penalties corporately or personally. Which is lucky for Lord Stephen Green, the ordained minister and Government Trade minister (!) who was… er… head of HSBC while it worked for the cartels.
Breuer was pressed on why the US authorities had agreed to a deferred prosecution deal for the bank. He dismissed accusations that prosecutors had not been hard enough and said that the Justice Department had looked at the "collateral consequences" to prosecuting the HSBC or taking away its US banking licence. Such a move could have cost thousands of jobs, he said.
Why no criminal record or prosecutions? Because the American authorities have decided that as well as being 'too big to fail', HSBC and other banks are 'too big to jail'. Essentially, the authorities have decided that Justice should remove her blindfold and decide who gets punished depending on how important they are. No doubt the corner boys who sell the product which made HSBC and the cartels so much money will continue to get decades of jail time for pitifully small amounts of crack or whatever. But the bank which turned an underground industry into a multibillion global concern (and there's a strong argument that drug money helped keep the money markets liquid during the credit crunch, thus earning the gratitude of banks who decided not to be too sniffy about the money's origins) gets off free and easy. £2bn is nothing - epecially compared to the bonuses paid out.
I teach a class on ethics for students of media and religious studies. We give them two basic ethical frameworks, Kant's and the utilitarians' approach. To Kant, an action is immoral or moral regardless of purpose, motivation or outcome. To the utilitarians, the morality of an action is determined by its effects.
The US banking authorities have decided that the short-term consequences of prosecution – lost jobs and a depressed share price – outweigh the consequences of properly prosecuting HSBC. They've plumped for a utilitarian version of justice. I think they're wrong. We now know that justice is officially dependent on economic weight. We always knew that corporations don't suffer the same consequences of their actions as you and I might, but it's never been stated as a legal good. HSBC and its competitors now know that some loose change is as good as a get-out-of-jail free card. Why would they bother complying with any laws when they can simply pay the equivalent of a parking fine later?
More worryingly, the public may (should?) cease to comply with the legal and justice system in future. The point of both is that they're impartial, offering protection and punishment on an equal basis to all. This is no longer true. If corporations can escape the consequences of their actions, why should we invest in the concept of state justice any more? We already know that taxes are only paid by the little people: now it seems like criminal liability has gone the same way.