Libor trial • Hacker News Board

Re: Libor trial

#11

Post by fweespeech » Tue, May 26, 2015, 7:14 PM UTC

steego wrote: post #5

I'm so glad they're finally putting a whipping boy on trial. Now, I know some of you are a little skeptical about the efficacy of punishing whipping boys, but let me explain. We can't possibly whip banking executives when they do something wrong because we live in a civilized society that respects the "divine right of banking executives". Instead, we assign each executive a whipping boy and the executive then develop…

While I'm vastly amused by your post, the whipping boy isn't a good analogy. As the people on trial are the ones that actually execute the orders, it does act as a deterrent.

> The court was played a clip where Mr Hayes said he was part of a system in which influencing Libor was "commonplace", although he admitted he was a "serial offender".

Even if you only put 5% of these guys in jail, its still enough of a risk some people might choose to be honest.

Re: Libor trial

#12

Post by imglorp » Tue, May 26, 2015, 7:51 PM UTC

There's a whole network of nasty crooks behind this. I demand more blood.

http://graphics.wsj.com/libor-network/#item=Hayes

Re: Libor trial

#13

Post by udev » Tue, May 26, 2015, 8:06 PM UTC

steego wrote: post #5

I'm so glad they're finally putting a whipping boy on trial. Now, I know some of you are a little skeptical about the efficacy of punishing whipping boys, but let me explain. We can't possibly whip banking executives when they do something wrong because we live in a civilized society that respects the "divine right of banking executives". Instead, we assign each executive a whipping boy and the executive then develop…

So what is your theory about this?

That the (whip boy) trader was executing trades as ordered by his (master) superiors in his own name, i.e. taking all the risk, but sharing the profit?

Re: Libor trial

#14

Post by steego » Tue, May 26, 2015, 8:19 PM UTC

fweespeech wrote: post #11

steego wrote: post #5

I'm so glad they're finally putting a whipping boy on trial. Now, I know some of you are a little skeptical about the efficacy of punishing whipping boys, but let me explain. We can't possibly whip banking executives when they do something wrong because we live in a civilized society that respects the "divine right of banking executives". Instead, we assign each executive a whipping boy and the executive then develop…

While I'm vastly amused by your post, the whipping boy isn't a good analogy. As the people on trial are the ones that actually execute the orders, it does act as a deterrent. > The court was played a clip where Mr Hayes said he was part of a system in which influencing Libor was "commonplace", although he admitted he was a "serial offender". Even if you only put 5% of these guys in jail, its still enough of a risk so…

You're right. My whipping boy analogy is a bit leaky, especially if one tries to project it the specifics of this case.

Here's my concern: Employees work under incentive structures that are established by their employers and are supervised by the executive teams. When breaking the law becomes "commonplace" in a system, the people who are responsible for governing that system must be held accountable if the negligence verges on criminal.

As a society, it's critical we have a reasonable legal framework that strongly encourages executives to make sure they have effective internal controls to detect and discourage criminal activity from employees. If we don't have that, then we're effectively giving executives whipping boys who can be used to shield them from the bulk of liability.

Re: Libor trial

#15

Post by steego » Tue, May 26, 2015, 8:36 PM UTC

udev wrote: post #13

steego wrote: post #5

I'm so glad they're finally putting a whipping boy on trial. Now, I know some of you are a little skeptical about the efficacy of punishing whipping boys, but let me explain. We can't possibly whip banking executives when they do something wrong because we live in a civilized society that respects the "divine right of banking executives". Instead, we assign each executive a whipping boy and the executive then develop…

So what is your theory about this? That the (whip boy) trader was executing trades as ordered by his (master) superiors in his own name, i.e. taking all the risk, but sharing the profit?

I don't think one has to order people to break the law. I think it's easier to establish aggressive incentive systems that encourages employees to act very single mindedly. I also think it's easy to undermine internal controls by putting incompetent people in charge who are easily intimidated with bad performance reviews.

Re: Libor trial

#16

Post by supergirl » Tue, May 26, 2015, 9:37 PM UTC

this trial will change nothing; whole financial system is a circus of stupidity. the "scandals" will never end. people will always try to game the system and that's normal. this guy is basically on trial for not being ethical.