VISA and Mastercard, along with other major financial institutions, have agreed to pay retailers at least $6b n to settle a lawsuit in the US that alleged they conspired to fix the fees that stores pay to accept credit cards.
The size of the fine should be enough to discourage further wrongdoing by global financial institutions. But this might be too much to hope for, given the litany of allegations of abuse of customers and self-enrichment by bankers.
In a separate development, it has been reported that Morgan Stanley has estimated that 12 global banks linked to the London interbank offered rate scandal may face penalties as high as $22bn.
It is necessary that their executives and shareholders feel the financial pain of their unlawful actions. This will encourage them to be more vigilant about the activities of these institutions.
Strict enforcement of customer rights and the applicable laws and regulations, along with harsh penalties for wrongdoing, are the only ways to change the culture of exploitation and self-interest that is seemingly rife in the financial services sector. Dubai, July 16