Page 7 - The Banks Article

How the banks responded to this cataclysmic crisis was not

what most of their customers and tax payers expected of
them. Instead of operating in an honest, prudent and

transparent manner many of the banks engaged, in the

following years, in fraudulent activities with an introverted

focus for their actions (Diagram 2).

Pressure to maximise shareholder profit may lead to bad

profits and ultimately illegal profits.

Diagram 2: Bank Shareholder Value Maximisation

It would be natural in a period of crisis, to expect banks to

trim their sails by reducing costs. Unfortunately, bank costs
were not limited by pay freezes for higher executives nor

were profits redistributed to those who bailed them out.

Moreover, new legislative processes were actively
circumvented.