I love history.
Let’s say you are one of the millions who have recently thought, “Dude, why don’t we just march up and down Wall Street and The City of London and the financial districts of Frankfurt and Brussels and just hang all them suckers! That’ll fix the problem!”
Well, we used to do that – and much worse. Western society has used torture, hangings, burning at the stake and more to punish cheaters, counterfeiters and other financial criminals. Check this great piece in the Wall Street Journal:
In medieval Catalonia, a banker who went bust wasn’t merely humiliated by town criers who declaimed his failure in public squares throughout the land; he had to live on nothing but bread and water until he paid off his depositors in full. If, after a year, he was unable to repay, he would be executed – as in the case of banker Francesch Castello, who was beheaded in 1360. Bankers who lied about their books could also be subject to the death penalty.
In Florence during the Renaissance, the Arte del Cambio – the guild of mercantile money-changers who facilitated the city’s international trade – made the cheating of clients punishable by torture. Rule 70 of the guild’s statutes stipulated that any member caught in unethical conduct could be disciplined on the rack “or other corrective instruments” at the headquarters of the guild.
I think the only way we can stop the corruption in the financial sector is if people want financial crimes punished and the institutions regulated by a government entity that is run by people who aren’t part of the revolving door. It is the only thing that has ever worked – and we’ve tried everything.