Regulatory revenge.

Gillian Tett devoted an entire article in the Financial Times on Friday to making the point that the $100bn of fines imposed on banks in the US recently is largely fatuous because it fails to punish those responsible. Second, the ACTUAL PEOPLE punished, i.e. shareholders are not guilty. And third, much the biggest effect will be to raise the return demanded in future by bank shareholders. After all, if you’re going to have to pay billions in fines for the crimes of others, you’ll want a reward for doing so.

That point of Gillian Tett’s is hardly original. Sundry economics bloggers have already made that point. E.g. me here.

However, I do like the phrase “regulatory revenge”.