To avoid collateral damages, the fines of those who create and finance jobs should be paid in new shares and not in cash.

Sir, I refer to Henry Foy’s and James Politi’s “Volkswagen scandal fuels fears for jobs across Europe” October 13.

Again it points to reasons why the world should not impose fines payable in cash on those who misbehave and deserve punishment, but who generate jobs, or credit. That would only weaken them and thereby cause many casualties among the civilians who are not responsible.

Have them instead to pay all fines by issuing new shares to be delivered to whomever a judge feels should get these.

The dilution of existent shareholders is more than enough punishment to guarantee that management will be more careful.

And this is especially valid when regulators, by their incompetence or any other reasons, have helped to induce the misbehavior. 

http://teawithft.blogspot.com/2015/10/vw-emissions-controls-fines-for.html

http://teawithft.blogspot.com/2015/10/bank-fines-should-be-paid-with-bank.html

@PerKurowski © J

The collateral damage produced in the economy by faulty bank regulations, was mostly for the lack of a purpose.

Sir, Wolfgang Münchau writes “The west risks collateral damage by punishing Russia” July 28. That could be… but at least that would be the consequence of a purpose.

What is truly sad is to see that all collateral damage in the economy resulting from the distortions originated when favoring with ultra small capital requirements for banks assets perceived as absolutely safe, was more for the lack of a purpose.

John Augustus Shedd, 1850-1926 wrote “A ship in harbor is safe, but that is not what ships are for”

And though that clearly goes for banks too, that was something completely ignored by bank regulators.

Münchau writes “If you want to know how sanctions will affect the global economy, it is best to follow the money”. Indeed, and why does he not follow the money to understand where the global sanctions against the risky having access to bank credit took us? To lending too much to Greece? To investing too much in AAA-rated securities? To financing too much real estate in Spain? I believe so, but since he keeps so mum on it, what does he believe?