Advanced economies with "good governance" are facing alarming incidents of business corruption at the highest levels. Jeffrey Sachs Last Modified: 05 May 2011 07:04 |
| Two years after the US financial crisis, not a single Wall Street executive has faced jail time [GALLO/GETTY] |
The world is drowning in corporate fraud, and the problems are probably greatest in rich countries – those with supposedly "good governance".
Poor-country governments probably accept more bribes and commit more offenses, but it is rich countries that host the global companies that carry out the largest offenses. Money talks, and it is corrupting politics and markets all over the world.
Hardly a day passes without a new story of malfeasance. Every Wall Street firm has paid significant fines during the past decade for phony accounting, insider trading, securities fraud, Ponzi schemes, or outright embezzlement by CEOs. A massive insider-trading ring is currently on trial in New York, and has implicated some leading financial-industry figures. And it follows a series of fines paid by America's biggest investment banks to settle charges of various securities violations.
There is, however, scant accountability. Two years after the biggest financial crisis in history, which was fueled by unscrupulous behaviour by the biggest banks on Wall Street, not a single financial leader has faced jail. When companies are fined for malfeasance, their shareholders, not their CEOs and managers, pay the price. The fines are always a tiny fraction of the ill-gotten gains, implying to Wall Street that corrupt practises have a solid rate of return. Even today, the banking lobby runs roughshod over regulators and politicians./.../
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