In banking, however, the culture that helps solve agency problems is lacking.
So, how to create it, given the obstacles I've described?Read it at Stumbling and Mumbling
We could learn from pre-modern states. They imposed brutal punishments upon wrong-doers, in part because they needed to terrorize their subjects into submission simply because they had no other means of controlling them. Similarly, if shareholders or regulators cannot control bankers - and it looks like they can't, draconian punishments for wrongdoing are needed to keep them in line. As Voltaire nearly said, "it is wise to kill a banker from time to time to encourage the others."
Changing banking culture
by Chris Dillow | Investors Chronicle
Whatever it takes, I guess. We lock up people for a long time for a lot less.