A day after Attorney General Eric Holder asserted that prosecutions of Wall Street’s largest financial institutions have lagged because they are, in fact, “too large” to prosecute, a pair of Democratic senators again challenged regulators over the lack of legal oversight into the banks’ activities before and after the financial crisis.
Large banks have reached a slew of settlements with federal authorities over mortgage and foreclosure fraud, rate-rigging scandals, and money laundering schemes, but they have largely avoided prosecution, a fact Massachusetts Sen. Elizabeth Warren (D) pointed out to regulators from multiple agencies during a Senate Banking Commiteee hearing this afternoon. Prosecution, Warren noted, is less likely for banks that jeopardize the integrity of the American economy than it is for common criminals,
via Sens. Warren, Merkley Blast Regulators For Making Wall Street A ‘Prosecution-Free Zone’ | ThinkProgress.
Five years since the start of the financial crisis, taxpayers would still be forced to foot the bill should more banks fail because countries are delaying alternative solutions.
Finding a way to shut down big banks quickly without triggering market mayhem — the threat of which prompted governments around the world to resort to publicly-funded bailouts between 2007 and 2009 — remains a mammoth task.
via Still no escape for taxpayers if banks go bust | Reuters.
Sandy Weill, the former Citigroup chairman and CEO credited with building the bank into a financial superpower, now says big banks should be split up.
In a wide-ranging CNBC interview, Weill suggested investment banks should be split from banks that provide retail and commercial banking services.
That’s an unusual outlook from Weill, who pushed the government to overturn the Glass-Steagall law that requires deposit-taking institutions to separate from risky investment banks.
via Former Citigroup CEO Weill: Break up the banks – Market Day.
And again no one goes to jail. If you are a bank you get to break the law and buy your way out. If corporations are people then their CEOs should go to jail like an individual:
Flagstar Bancorp Inc. has agreed to pay $133 million to settle claims its mortgage unit engaged in fraudulent lending practices.
The U.S. government said in a release Friday it filed and settled a civil lawsuit against the Troy-based holding company for Flagstar Bank. The government says the bank improperly approved residential home mortgage loans for government insurance.