Dominic O'Connell, writing today's Sunday Times, has argued that doing dumb things, even when they have awful consequences, is not the same as being a criminal. His position is that it is hard today to convict a banker for being an idiot, which is probably correct, but changes may be in the works for the future.
Boardroom experts talk of the hardware and software of bank corporate governance, with the former including risk appetite and CRO positioning while the later includes the softer concepts, such as conduct, behaviour and the like. Bank conduct, culture and governance are obviously hot areas these days. US Federal Reserve Governor Daniel Tarullo has been promoting the concept of expanding fiduciary duties of banks directors, introducing what Armour and Gordon (2013) call a "stick" into the boardroom. The G30 has recently introduced a road map to reinforce conduct responsibilities in the boardroom, while the UK regulator has issued Senior Persons Regimes (for banks, insurers and asset managers), ethical guidelines for boardroom norms, and standards around detecting and reporting dishonesty and imprudence in bank settings.
Misjudgement is not the same as criminal behaviour, but the line between poor judgement and suffering consequences for misconduct may be narrowing and dialling back to earlier times.
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