Employees at five banks colluded to earn supranormal profits in rigged markets (nytimes). Presumably they were rewarded by their employers with correspondingly huge bonuses. Those bonuses by now have been turned into beach houses, Gulfstreams, etc. The government comes along more recently and fines “the banks” $ 5.6 billion. But it seems to me that this fine has to be paid by the shareholders of the banks, not past, present, or future employees. If we assume a labor market the employees of banks are paid a competitive wage. So the banks that have been fined can’t reduce salaries or their better people will jump ship. Thus it will be shareholders who pay. But public company shareholders, due to SEC regulations that prevent them from directly nominating board members, exercise virtually no control over what actions bank employees might take. How then can this fine reduce the likelihood of similar behavior in the future? Wouldn’t a rational current bank employee still seek to collude with counterparts at other banks, rig a market, make huge profits for a while, take home and keep huge bonuses, etc. Why does the employee care if at some future date a shareholder will have to pay a fine because of his or her behavior?