Accountability: When the grotesque becomes a burlesque

Politicians pooh-pooh-ed the criticism when banking licences were handed out left, right and centre. The argument was a strong one in an economy where the majority were unbanked. But with little or any restrictions on loan beneficiaries and such (it wouldn't do to restrict banking in a free-market economy) the sector is in an almost irretrievable mess. Previously, it was the public sector banks that tied itself in knots. The private sector has done as remarkably well. That is, save the multinationals (thank goodness for good governance).

Deutsche Bank is having to shell out €1.5 billion as fines for tax fraud to the US without it being clear if they or the German government will cough up the money. There were few dilemmas for HSBC which in the last instance paid out $200 million on money laundering charges. True, the two organisations have deep pockets as do the German car makers that paid out €50 billion for selling cars with faulty parts. To put this in context, that's about as much as the UK will have to pay as divorce bills from the European Union (EU).

Large as they are, the sums of money are no where as relevant as the ethical and customer safety that were put on the clothing line. Kobe Steel admits having fiddled with its base raw material. The larger question is where did all that faulty steel go? Where was it used and, more pertinently are those structures and vehicles still in use. That's a more difficult trail to follow and may defy the best that technology has to offer, at least where the distant last is concerned. The fines imposed go to government exchequer and not to the consumers that were or are in danger.

Buildings that were identified in Dhaka and Chittagong as having not been built as per approved specifications were to have been pulled down at the owners' cost. While the headline space is occupied with issues that are more juicy, the simple safety factor of whether government inspectors have done their jobs isn't being raised. There's probably been a fine of sorts to create collective amnesia.

But when even the government asks rude questions such as why a single company is buying over so many banks, there's more than a sniff of something wrong. If banking rules have been followed, experienced private sector chief executives shouldn't have to be sacked a dime a dozen. Shouldn't is obviously miles away from wouldn't. No matter how qualified, a chief executive officer (CEO) overruled by the board has his or her hands tied. Why they didn't do the honourable thing and resign is as good a question. In the meantime, money appears to have just evaporated into thin air from Farmers Bank and Basic Bank. Yes, the Chairman and Board members stepped down, CEOs were fired, investigations began. But when one Chairman says he can claw back the money given another term - the grotesque becomes a burlesque. Of greater concern is the small depositors who can't get their investments back and even more ominous is that joint funds, some of them government, are also at high risk.

It's easy to say that bailouts will come from the government. After all, elections are less than a year away. But if the Prime Minister does an Angela Merkel in refusing to bail out failing bank, the fat really is in the fire.

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