Daily Archives: July 26, 2011

Without fear of punishment CL Financial – CLICO Executives had no limits

“If you let people get the idea that they can never be punished, there is virtually no limit to the rules they will break.  Asset-stripping, Bribery and Corruption can become the new norms of a governing class and that is what has happened in our country.”

This is an edited version of Afra Raymond’s address to the 4th Biennial Business Banking and Finance Conference (BBF4) held at the Trinidad Hilton from 22nd to 24th June, 2011.

The session he participated in was devoted to ‘Lessons from the Financial Crisis: The Resolution of Failed Entities’.

by Afra Raymond

Thanks for the invitation to speak at this forum, it was last-minute, but welcome, since our local Institutions of Higher Learning have not spent the necessary time to explain and analyse this financial fiasco.  I have been very critical of the Institute of Business, the Institute of Social and Economic Research, the Faculties of Economics and Management and the Caribbean Centre for Money & Finance, so it is great to see you making a start on this overdue work.  It is my pleasure to participate in these proceedings.

I want to start by shifting focus to the arena of the mind and the existence of elements such as moral and ethical values, as well as social standards.  In 1971 there was a famous series of psychological experiments in which selected students entered a two-week role-play as prison-guards in control of other people who were playing the role of prisoners.

That experiment was conducted at Stanford University in California and the results were that most of the prison guards adopted cruel behaviour with most of them being upset when the experiment was stopped after only six days.  The entire experiment was filmed and the prisoners suffered from regular acts of wickedness, abuse and sheer perversity – one-third of the guards acted sadistically.

The Stanford Prison Experiment as it is now known, was heavily criticised as being unethical and unprofessional.  Of course the other aspect is that it re-opened the perennial discussion into the nature of things.  The nature of our nature, as it were – ‘Are we humans naturally evil and cruel?’  The learning seems to be that well-adjusted and reasonable people can very quickly lose their moral compass in a situation with a lack of the conventional controls such as disapproval and laws.

The New Norms of the Governing Class…

No surprise to those familiar with history and politics, but the lesson for us in T&T is that…

If you let people get the idea that they can never be punished, there is virtually no limit to the rules they will break.  Asset-stripping, Bribery and Corruption can become the new norms of a governing class and that is what has happened in our country.

We have never had a strong tradition of detecting and punishing White-Collar Criminals, so if we are to make a start in terms of the resolution of failed entities, that has to be the starting-point.  We cannot reconstruct or resolve the failed entities if we do not change that aspect of our culture – the absence of consequence has to be abolished. Continue reading

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