I'm absolutely not familiar with the intricacies of law, so hence the question.
What would it take to establish an International Trial for Economic Damages? Given the extent of the suffering that will befall millions across the globe as a consequence of what has been amply debated everywhere, does anyone think there might be the prerequisites to call for a modern day equivalent of the Nurmberg Trials?
Just got off the phone with a furious middle age lady who fiercely insisted that this, in her opinion, should indeed happen.
And I'm overhearing casual conversations where folks are calling for "severe penalties" economic or otherwise, for those who were involved in this financial disaster... flavour o' the times...

Paul

can I be the judge??

While it would be nice to see everyone responsible being seriously done over, it still doesn't recover the money or stop the slide.

Its an interesting question. Certainly, the question about whether Directors should be able to be criminally liable is something that's been really widely debated in legal circles.

I'm happy to be corrected on the below- I am not a credit risk nor a financial markets expert by any means. Just my understanding gleaned from working in the circles.

The current global economic climate is a direct result of the subprime crisis. Company X (a small to middling company in the middle of nowhere) lends money to someone who has no deposit, no savings. They then package the risk and resell it, which again gets repackaged and resold over and over again. Soon, the risk ratings around the initial loan is lost in translation, which means the risk for this poor loan (which is more than likely to be defaulted upon), is in the hands of a very prestigious company.

Someone like Standard & Poor's comes along, looks at the company that owns it now, and slaps an AA rating on it. Seeing the AA rating, and the prestigious brand owning it, investors flock to it.

Meanwhile, the guy who bought the house defaults on his loan. A few hundred thousand people are in the same boat, and also default. The market value of the properties go down since, there are thousands of them- supply exceeds demand drastically. The market slides backwards. Expected returns don't actually come through. And at the end of the chain, this very prestigious, secure investment tumbles down like a house of cards.

A very simplistic explanation. I'd love a more detailed one by someone in the know.

But who do we blame here? The person who took the loan? The person who gave him the loan? The people in the chain who resold it? The person at the top of the prestigious organisation that bought it? Rating agencies like S&P? The investor who ended up losing their shirt?

All of them maybe. But first step should be to analyse the problem and prevent it from happening again. And to do that we have to find out who's job it was to prevent something like this happening in the first place.

In most countries, that would be government established financial regulators, who monitor the risk controls around transactions like this, who set minimum lending standards. I think its interesting, that governments prop up the economy by sticking a bandaid of an 'assistance package' on the gaping wound the markets have sustained.

And yet, when it comes to regulation cries of 'free market economy' have drowned out voices calling for tighter restrictions and controls on lending, trading, etc.

Governments and regulatory bodies really need to get serious.

I don't know if I'd have put the tags "Nuremburg" or "war trials" as I can't see nearly 60 million people dying as a direct consequence of this, as was caused by the people tried there.

And who would you prosecute?

Big bank execs for presiding over their bank going under?
Pension fund trustees and other activist investors for demanding share buy backs, leverage and higher returns?
The lemming public for causing bank runs?
The US auto execs building huge off trucks?
Regulators for being clueless?
Politicians who demanded that people had the opportunity to buy their homes, regardless of whether it makes commercial sense? (The Feffin Mae/Mac thingies in the USA)

By the time it's sorted out, the planet is screwed...

LOL after one month this old chestnut comes back to life
- In the meantime more ordinary Joes and Janes are demanding heads to roll + orange suits
- In the meantime more $$$ have been helicoptered to US institutions...
- ... and the FMI has humbly asked for China + Gulf Countries (i.e. Emirates) to "do their part" to help
- The CEOs of the US auto industry fly to Washington and are publicly whipped because they didn't fly commercial
- Pension funds are starting to crack
- Italy is looking to something like 400k new unemployed come new year eve
- an italian senator, Marcello Pera, has finished writing a book calling for the return of the christian / catholic moral order as the root of Western civilization, and Pope Benedict has written his usually severe preface (a rarity, indeed) to this learned tome

Just to mention some of the things that spring immediately to my mind.

There is going to be a whiplash against the financial and economical elite. People are asking for serious accountability, and I do believe there is probably even less than 100 individuals who had real POWER to prevent things to spin out of control - had they chosen to act differently (i.e. against heir vested interests).

IMHO if nobody is ever held accountable, this form of financial and economical degeneration is bound to repeat itself as soon as things stabilize to whatever new state of equilibrium.

So back to the question (besides the fact that the system needs to be fixed so it can' be tampered with again): could certain individuals be called to pay for the decisions that are wreaking such large scale economic damage?

Would his call for an overhaul of the existing int'l law system? If so by who?
What kind of technicalities would prevent one or the other "obvious perp" to be tried?...

Thx

Paul

The guy who oversaw all of AIG structured finance (i.e. CDS) operations in London, for example:

http://www.bloomberg.com/apps/news?p...tk4&refer=home

Paul

Icelanders storm the Central Bank today .. in Icelandic though.

http://www.mbl.is/mm/frettir/innlent..._sedlabankann/

Paul

fully agree with you, but I begin to doubt we will ever see anyone's hand held to the fire - the big boys are well and truly entrenched.

Check out this old fart for example - $115 million for overseeing the downfall of Citi, and he doesn't have an iota of remorse. In fact, he blames the operating team for not having implemented his strategy correctly

Far from being booted out, his kind are resurfacing in the Obama administration... exactly what kind of CHANGE do the American people expect from these guys?

I suspect the people of Bangkok may have discovered the only one surefire route to change. The Americans may want to study their tactics.