Spot the shudder
SO IF everyone knew about BCCI — or everyone except its luckless depositors why did no one do anything about it? The Bank of England was leery from the beginning, and wrote a special category of `licensed deposit takers' into the 1979 Banking Act so as not to have to recognise BCCI as a bank. That Act, for the first time, replaced the Bank's moral suasion, and the minatory effect of the Governor's raised eyebrows, with powers and duties laid down by the law. The Bank could no longer rely on calling miscreants in and throwing them out. It had to work by due process, and a slow process that can be. To deal with BCCI, convictions in Florida would not suffice. The Bank had to wait for evidence which would stand up in British courts. It waited a long time. Do we need a new category, like that for St Trinian's School — which, you may recall, was recognised by the Department of Education with a light shudder? What the depositors need is a way of recognising the shudder. The Bank has powers of disci- pline which stop short of an outright busting, but they are all of them exercised behind closed doors. No names, no pack- drill, and, for the depositor who has not heard the gossip, no warning.
Previous page
