So Bank of America is to pay $16.65bn to avoid justice. Another financial institution uses petty cash to get itself out of jail.
Apparently, law enforcement in the US is saying that no institution is big or powerful enough to escape its clutches. I assume by that they mean that none of the long list of financial powerhouses that drove the world economy to its knees are unable to buy a deal with the supine regulators.
$7bn of the fine is going to help those who have been financial difficulties because they'd been sold one of the bank's junk mortgages back in the day. That's good.
But still no one has gone to prison. A while back the head of Standard Chartered was whining about how unfair people were being to bankers, about how new regulations were stifling risk taking. But still none of his peers have been brought to book, sent down for what their risk-taking dumped on the world.
The coverage points out that the payment is in settlement between the bank and regulators. The bank sold flawed mortgage securities that contributed to the near bankrupting of the world economy but the regulators have agreed a settlement. And the size of that settlement is tiny against the asset base of the bank.
As John Coffee (great name), a law professor at Columbia, pointed out 'there is another shoe that needs to drop before we can assess this settlement. This is the largest fine but yet again we have seen an ability, or a reluctance, to name and go after the individuals responsible.'
These dodgy mortgages didn't create and sell themselves. People created them, bundled them up and sold them on. And they they either knew what they were doing or they shouldn't been in the lucrative positions they held.
There was outrage this morning at the news that shop lifters stealing a little fresh food in the North East of England were not being prosecuted. The full weight of the law should be meted out against them to discourage this outrageous behaviour. I'll agree with that when the first banker responsible for stealing the livelihoods of many of these affected northeasterners goes to prison for a long stretch.
Friday, August 22, 2014
And still no one has gone to prison...
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