When a company finds itself seven billion dollars poorer, it’s normally a big deal. Yet when the Justice Department announced Monday that Citigroup had agreed to pay seven billion dollars (four billion of which will be in hard cash, and most of the rest in what are called “soft dollars”—mortgage modifications, financing of rental housing) to settle charges relating to its marketing of bad mortgages, the general reaction was muted, to say the least. Citigroup’s stock, buoyed by its announcement of better earnings, actually ended the day higher. And while the Justice Department trumpeted the fact that this was the biggest cash penalty ever levied against a company, it’d be hard to find anyone who felt that the deal was going to have any impact on Wall Street’s behavior in the future.

There’s a simple reason for that: punishing institutions, rather than individuals, doesn’t get at the root of the problem. Bank shareholders (who are the ones effectively paying the fine) certainly deserve blame for tolerating—and, in some cases, arguably encouraging—banks’ risky and dubious lending practices during the housing bubble. But Citigroup shareholders were already harshly punished by the market in the wake of the housing crash: at one point, Citigroup’s stock was down ninety-eight per cent from its all-time high, and today it’s still more than eighty per cent below its 2007 peak. If that didn’t teach shareholders to be more cautious about investing in big banks, it’s hard to see how this fine will do it.

More to the point, if you really want to punish and, perhaps more important, deter bad corporate acts, you have to penalize the individuals who committed them. Instead, at least so far, the people who made the decisions to securitize and market loans that they knew were almost certain to go bad have gone untouched. Set aside the question of criminal prosecution. They haven’t even been forced to give up their bonuses or the salaries they got as a reward for putting together these ridiculous, and often corrupt, deals. They’ve been able to keep gains that were, by any measure, ill-gotten.

Punishing individuals is especially important in the case of Wall Street, because one of the biggest problems in the run-up to the housing bubble was that individual traders and executives were incentivized to engage in behavior that was incredibly lucrative for them (since their bonuses were pegged to short-term performance) but incredibly destructive to their companies. This was the basic logic behind what they called “I’ll be gone, you’ll be gone” loans, where people were willing to do deals that they knew were likely to blow up, because they figured that by the time the deals went bad, they themselves would have moved on (while pocketing hefty bonuses in the meantime). You can certainly fault Citigroup and the other Wall Street banks for setting up these kinds of incentive structures, and for creating a business climate in which shady behavior was encouraged. But while the banks themselves did incredibly badly during the financial crisis, plenty of Wall Street employees (including plenty of bank C.E.O.s) did incredibly well. And the fact that they’ve kept the money they made doesn’t exactly send the right message.

It’s true that over the past few years banks have tried to do a better job of making sure that the interests of companies and employees are aligned, so that contracts are now more likely to have things like clawback provisions (where ill-gotten bonuses have to be paid back). But the reality is that short-term incentives are still incredibly powerful on Wall Street, and there are always going to be people on the Street (which is the ideological center, after all, of eat-what-you-kill capitalism) who put their own interests ahead of those of the company—or, needless to say, of their customers. So it’s naïve to think that a settlement that touches no individual is going to have any deterrent effect going forward. Institutional accountability is important. But holding people accountable is ultimately the only way to bring about real change on Wall Street.

Above: The Citigroup corporate headquarters in midtown New York. Photograph by Andy Kropa/Redux.