As of this week, Citicorp, JPMorgan Chase, Barclays and Royal Bank of Scotland are felons, having pleaded guilty on Wednesday to criminal charges of conspiring to rig the value of the world’s currencies. According to the Justice Department, the lengthy and lucrative conspiracy enabled the banks to pad their profits without regard to fairness, the law or the public good.
Besides the criminal label, however, nothing much has changed for the banks. And that means nothing much has changed for the public. There is no meaningful accountability in the plea deals and, by extension, no meaningful deterrence from future wrongdoing. In a memo to employees this week, the chief executive of Citi, Michael Corbat, called the criminal behavior “an embarrassment” — not the word most people would use to describe a felony but an apt one in light of the fact that the plea deals are essentially a spanking, nothing more.
As a rule, a felony plea carries more painful consequences. For example, a publicly traded company that is guilty of a crime is supposed to lose privileges granted by the Securities and Exchange Commission to quickly raise and trade money in the capital markets. But in this instance, the plea deals were not completed until the S.E.C. gave official assurance that the banks could keep operating the same as always, despite their criminal misconduct. (One S.E.C. commissioner, Kara Stein, issued a scathing dissent from the agency’s decision to excuse the banks.)
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Banks are the enemy!
Anger Without a Cause
2 hours ago
5 comments:
Government toadies who are supposed to regulate these Pantagruelian banks are
too impressed by their wealth.
Remember that pernicious phrase, "Too big to fail" ? Which really means too rich to punish.
Anyone who even entertains the notion that you can regulate a bank - or ANY enterprise for that matter - into perfect behavior, is delusional. That comment is NOT up for debate. In fact, regulation is so poorly administered that it is actually a destabilizing factor - also not up for debate.
If you look no further than Adolph Hitler as the cause for WWII and never look at the disaster known as the Versailles Treaty, you will never grasp the fundamental cause of the war. Likewise, if you only look at the banks and never look at the politicians (specifically Barney Frank & Al Franken) you will never understand the 2008 real estate collapse or any other bank "failure."
But that aside, I do agree that the behemoths are too big. Their mere size is destabilizing to the economy because their failure would be catastrophic. But please remind me...who let them grow so big? Hmmm...let me see...could it be...THE GOVERNMENT???????
I do not see the division between politicians and government as being so clean as Nikolaus suggests.
From Lew, Geithner, Paulson, O'Neill down to their subsecretaries and the top regulators at the SEC (both Team Red and Team Blue), they are all alums of Citibank, Goldman Sachs or Chase. Then after their time "serving" in govt, they head back to their multi-million paydays at the TBTF banks. This is government completely co-opted by the big banks, who provide the foxes to guard the henhouse.
Even so, saying that since we the public are not regulating these felons effectively that we should just throw up our hands and call it a day is comical, but I'm sure it is a type of comedy that delights the criminals in the Govt/Bank revolving door.
Who said the division between politicians and government was clean? Absolutely NOT me! Nor did I make any comment remotely close to "throw up our hands and call it a day." You are daft if you think I did.
I'm fine pointing out all the crooks in banking...and in journalism...the legal profession (don't EVEN get me started)...sports...advertising...car sales...
But I assure you that banking is loaded to the gills with honest, hard-working schlubs earning a living. The issues at hand are far more complex than you can imagine. The "banks are evil" meme is as tiresome as it is trite.
My 'daftness' is as follows:
You said "the notion that you can regulate a bank - or ANY enterprise for that matter - into perfect behavior, is delusional" from this there are two options. Either you are saying:
a) the act of regulation is futile (what I assumed you meant, giving you the benefit of the doubt)
or
b) sure regulating is worthwhile, but no one should assume it can be done to perfection. (In which case you are guilty of a serious strawman, since no one mentioned 'perfection').
Then you minimised the vast corruption and felonies listed in the article by saying there are plenty of "honest schlubs" in banking (of course there are; no one ever said there weren't. Strawman #2).
John's leitmotif stands. Banks are the enemy.
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