He does suggest that, in this transcript of an interview with The Independent, but in fact he makes a more detailed and interesting point.
“We’ve seen so many events where the banks and others have engaged in rent seeking, creating inequality, ripping off other people, and none of them have gone to jail. None of them have been prosecuted individually.
Banks are people. The irony is that most of these cases, if you look at what happened, the bank pays a fine. Who pays the fine? It’s the shareholders. But the shareholders have usually been ripped off as well by the managers.
So the managers sit there exploiting not only borrowers but also the shareholders. In the case of the UK, I gather the fines go to the FSA [Financial Services Authority], reducing the need for the tax that they impose on the banks. So the banks pay the fine and other banks benefit. It’s redistribution among the banks. They’re all guilty of these things. You pay this time, I’ll pay this time. It costs them zero. So we have a system of very weak accountability and no individual accountability. And clearly that’s the way they wanted it.”
And here is one key recommendation, summarised by the interviewer.
“The banks, said Stiglitz in the interview, “create the non-transparent market” by dominating the legislative process that is suppose to control it. “For every meeting that the government has with [bankers], it [should] have to have a meeting with the labor groups and the representatives of civil society,” he said. “The problem today is that there’s not equality of access.”
I would go a step further. I would include the media in this calculation. the BBC and many other outlets routinely call up bankers for their views on a particular situation, and then perhaps interview their own correspondent, who will frequently be at least semi-captured by the bankers’ world view, to put the ‘other side.’ No, make it a matter of journalistic ethics to recognise that the City of London or Wall Street view will represent one side of a polarised debate, and that the balancing view must be sought.
See more from Naked Capitalism on why Libor has (justifiably) raised such a stink in the UK, but raised so little attention in the U.S. (as Zero Hedge puts it: “perhaps because it is just tired of all the endless crime coming out of the criminal complex known as Wall Street.” But is there a glimmer of hope, too? Naked Capitalism:
We are seeing some signs in the US of an increased focus on the parasitic nature of big finance in the US media, of recognizing that particular abuses are part of a much larger pattern.
Perhaps. The rest of the post is rather more skeptical, but I will end on that hopeful glimmer.