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NCJ Number: 227867 Find in a Library
Title: Restorative Justice for Banks Through Negative Licensing
Journal: British Journal of Criminology  Volume:49  Issue:4  Dated:July 2009  Pages:439-450
Author(s): John Braithwaite
Date Published: July 2009
Page Count: 12
Sponsoring Agency: Australian Research Council
Canberra ACT, 2601, Australia
Type: Legislation/Policy Analysis
Format: Article
Language: English
Country: United Kingdom
Annotation: This article proposes the application of the principles of restorative justice to banks through "negative licensing" and restorative justice conferences as means of making bank loan managers manage risk (reduce the risk of making bad loans) rather than shift risk (pass the risk of bad loans on to another institution to make a quick profit).
Abstract: The most important element of a new regulatory structure to prevent the current financial crisis from recurring is to remove irresponsible risk shifters as soon as "hot spots" of failure to manage risk appear. This means that government regulators, much like local police, must engage in crime analysis to determine where criminal behaviors are likely to occur based on past behaviors of financial institutions that have engaged in quick profit-making by shifting rather than managing risk. Once the risk-shifters have been identified, "negative licensing" should be employed. Whereas "positive licensing" is required in admitting qualified individuals into professions that have important responsibilities that impact people's lives, "negative licensing" means the regulator can issue an order that the individual banker be banned from working in the finance industry. Under the principles of restorative justice, this holds the banker accountable for the harms he/she has caused. A second principle of restorative justice is preventive rehabilitation that attempts to manage the behaviors of those at risk for crime. This article argues for restorative justice conferences in financial institutions where failures to manage risk have been detected. Restorative justice conferences might not lead to the negative licensing of personnel out of the financial sector, but it might serve as a warning shot that will prevent the deviant behavior from deepening at that bank. The biggest impact on crime comes from proactive crime prevention at "hot spots." 29 references
Main Term(s): Criminology
Index Term(s): Accountability; Cause removal crime prevention; Financial institutions; Licensing; Regulations compliance; Regulatory agencies; Regulatory offenses; Restorative Justice; White collar crime
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