Iceland Has Jailed 29 Bankers. Why Can't the UK and US Do the Same?

Just before Christmas, the former CEO of Iceland's Glitnir bank and two other senior bankers were sentenced to jail terms of up to five years for market manipulation and breach of fiduciary duties. This brings the total number of senior Icelandic bankers so far sentenced for crimes in the run-up to the 2008 banking crash to 29.

By contrast not a single senior banking executive in the US or the UK has been jailed for their role in the financial crisis. Whilst banks - such as the five found to be rigging the Libor rate - have been hit with substantial fines, the individual bankers behind the fraud, market rigging and irresponsible lending that led to the economic meltdown have all avoided time behind bars.

On top of this came news last week that Britain's financial watchdog, the Financial Conduct Authority, has shelved a planned inquiry into the culture of banking. Whilst this inquiry was never going to hold the guilty to account, it was hoped that it might at least provide a level of transparency and analysis to help shape more rigorous future regulation.

The clearest example of why such regulation and cultural change are essential in the banking and beyond, presented to me some years ago, and in an unexpected way. I was at a weekend music festival, in a sunny field talking with friends outside a double-decker cider bus when my eye was drawn to a boy who could not have been older than ten. He was hanging around a nearby table surreptitiously eyeing-up a full but unattended pint. After glancing around to check no one was looking, he picked up the drink. But instead of indulging in a bout of underage binge drinking, the little tyke emptied it onto the grass beneath the table.

This may appear to be strange behaviour but in an attempt to be environmentally friendly this festival, like many others, offered a small refund on plastic glasses. At 10 pence the refund did not provide incentive enough for most adults to return their glasses, hence the festival was filled with battalions of children weaving through the crowds, their wobbly stacks of plastics protruding like glistening shark fins.

Whilst the activities of these mini-entrepreneurs, eschewing face-painting in a field or story-telling in a yurt in favor of earning hard cash, may be dismissed as a harmless if depressing sign of the times, the actions of the boy at the cider bus offer something more.

I'm sure that there was nothing inherently bad about the boy. He had not grown up in a moral vacuum and was perfectly aware that what he was doing was wrong. He almost certainly did not begin the day tipping out full pints of cider. Instead, he probably set out that morning collecting empty glasses with rosy-cheeked enthusiasm. But as the day went on he became more avaricious and his boundaries began to shift. It is this shift in moral boundaries and the circumstances under which it happens that hold the key to understanding where societies go wrong.

By pouring away someone else's 4 pint in order to get 10p in his pocket, the boy was displaying the same instincts as the bankers who maximised their profits, heedless of the damage being caused to the global financial system. He was showing the same motivation of those working for big corporations that exploit our planet's natural resources regardless of environmental and human costs. He was showing the same behaviour of governments who prop up brutal dictators, sell arms to the highest bidder or wage wars of aggression for the sake of power and profit.

This is not to say this boy had somehow taken his lead from those around him or that the corruption at the top our society mysteriously trickles down. Instead, it illustrates how the baser elements of human nature will emerge and flourish in certain conditions. The conditions in this case are an unregulated free-market within a materialistic, consumer-driven culture. For bankers, risky sales were incentivised with enormous bonuses, and bad debt was insured against with credit default swaps.

Like the boy, the bankers thought they could get away with it. And like the boy, the bankers - other than those in Iceland - were right.

If I could step back in time I wish I had acted more swiftly. I wish I had confronted that boy outside the cider bus and told him that the pint he had just tipped away was mine. I would have liked to have seen his shame at being caught and his discomfort at having to hand over four of his hard-earned pound coins. Perhaps he might have learned a valuable lesson. Instead, he skipped off across the field looking for someone else's pint of scrumpy to pour away.

This article contains some material previously published by the author on Huffington Post.