A Modest Proposal for Solving the Cyprus Crisis: It could Apply Here

Written by G. Ross Stephens   

Eurozone countries, the United States and other nations have experienced severe problems with the failures of their commercial and investment banks over the last several years. Aside from outright fraud, which occurred, these bankers are guilty money-laundering, betting against their investors and stockholders, other crimes, and, at the very least, reckless behavior with regard to depositors, investors, home owners, and others.

The latest banking problem is in Cyprus where depositors are to be taxed up to 10 percent of their accounts to ease problems caused by their banks, bank regulators, and legislatures. This action is certainly over the top. The depositors are not the problem.

Though only slightly 'tongue in cheek,'I suggest holding a weekly lottery. The names collected for the lottery would be those of bank CEOs and CFOs. Names could not be taken off the list for at least five years. If they resigned, the new official would also be on the list. When a name is drawn, that individual’s personal wealth would be confiscated and applied to whatever financial problem existed. The lotteries would go on until the problems of financial institutions are solved and they are held responsible for their actions.

Perhaps there should be separate lists and lotteries for commercial banks, investment banks, bank regulators who fail to regulate, hedge fund managers, corporate raiders, and legislators who fail to enact necessary regulations for their financial institutions.

If these reforms fail to solve banking problems, in addition to confiscating their wealth, we could use the Chinese solution. Put them in jail for twenty years. Or, . . . behead them.