Tom Hayes' libor sentence is excessive
In Britain you can commit manslaughter and go to prison for less than 14 years. You can have a go at someone with a knife and grievously wound them, you can set your pitbull on a child – and receive less than 14 years. And on these shores, as elsewhere – you can preside over that most corrupt of global sporting institutions, FIFA, and still walk the streets of Zurich a free man.
I think the sentence handed down yesterday to Tom Hayes, the libor manipulator, was wilfully savage.
Most people, however, do not think this. They think he s a nasty rich banker, a money-adoring chancer who had it coming to him. Good riddance.
Never mind the mitigation that he was a bit Aspergers. He can just think himself lucky he avoided extradition to the States where he would have been marching around in an orange suit for more than twice as long.
Hayes is a poster boy for the collective sins of an industry. (And, as one of its rare scalps, you can bet the Serious Fraud Office is now going to go after more libor-offenders, after years of abject failure to pin very much on anyone.) According to the court reports Hayes and his defence team succeeded in getting right up the nose of Justice Cooke, reversing a guilty plea and trying all manner of stunts. Somehow the defence gag that even Mother Teresa would have manipulated Libor if she had traded it doesn t look quite so witty in retrospect.
So when it came to sentencing the name of the game was retribution.
You diss the judiciary at your peril. Especially if you earn ten times as much as they do. Their amour propre is at least as important than the rule of the law.
Hayes also, incidentally, has a three-year-old daughter who is going to be talking to her father through a glass divide for the foreseeable future.
All one can hope is that some use is made of his time inside. It costs 65,000 to imprison the average person in this country once police, court costs and all the other steps are taken into account. (The Hayes case ran into millions and had to be directly funded by the Treasury.) After that it costs a further 40,000 for each year they spend incarcerated. It s quite right and proper that the money was spent on his trial, but I can only hope that he does something useful and teaches maths (if not how to cook the books) to some innumerate inmates while his team works earnestly on his appeal.
It is now almost seven years since the collapse of Lehman Bros.
And yet the ripples from the financial crash are more than matched by the bile and rage felt by normal folk for those in the financial services. They gambled and and we paid. Profits were private, losses were socialised.
And now it s back to business as usual.
Lloyd Blankfein of Goldman Sachs took home $24m ( 15.4m) last year. The Marxists are trying to fight back in Greece and Labour is looking to the unlikely figure of Jeremy Corbyn for its salvation. Everywhere is polarised rage.
A lot of heat, but precious little light.
It s hard to find many people in business with a good word to say about their banks. Banks still have so so far to go to regain trust among the public. It may even be an unachievable task.
Maybe banks are doomed to sit in the business firmament somewhere between Paddy Power and Wonga for ever. Most SMEs one talks to at best tolerate their banks, which are bureaucratic, faceless, risk-averse and fight over every last penny of the overdraft. No wonder that alternative sources of finance – angel investors, peer-to-peer loans, crowdfunding and company bonds – are proving so popular.
One thing’s for sure, though.
Very little proper progress will be made getting RBS back into shape while it is being run by George Osborne.
He may have qualities, possibly even the odd virtue, but being the de facto head of a bank isn t one of them.
The sooner the heirs of Fred are back in the private sector the better – even if it costs the taxpayer another few billion quid in the process.
Reference Root Document:
Tom Hayes' libor sentence is excessive