Tag Archive: banks

Sens. Warren, Merkley Blast Regulators For Making Wall Street A ‘Prosecution-Free Zone’

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.

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Fed Regulations Are Making Banks Riskier

Source:

Americans are becoming increasingly aware of how risky financial products, such as mortgage-backed securities, played a major role in the recent financial crisis. Few Americans, however, are aware that federal banking regulations encouraged banks to hold more mortgage-backed securities. In fact, the Federal Reserve is now in the process of strengthening these regulations, which will create more bank risk and the potential for more bank bailouts, with average Americans ultimately bearing the costs.

The Fed’s faulty rules are part of an initiative known as risk-based capital regulation. After the savings and loan crisis of the 1980s, the United Sates joined an international banking agreement known as the Basel Accords. The Fed previously evaluated risk based on the bank’s capital ratio, a measure of leverage calculated as the value of the bank’s equity divided by the value of its assets. This changed with the adoption of the Basel Accords in 1991.

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The Largest 0.2 Percent Of Banks Control 69 Percent Of Bank Assets

Source: ThinkProgress:

As the nation slowly ground its way out of the Great Recession, the biggest banks in the country (whose malfeasance played a large role in creating the downturn) grew even larger. According to data from the Dallas Federal Reserve, the largest 0.2 percent of all banks now control nearly 70 percent of all banking assets…

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Still no escape for taxpayers if banks go bust

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.

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Former Citigroup CEO Weill: Break up the banks

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.

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Western banks ‘reaping billions from Colombian cocaine trade’

Source: The Guardian:

Dr Mejia said: “It’s an extension of the way they operate at home. Go after the lower classes, the weak link in the chain – the little guy, to show results. Again, transferring the cost of the drug war on to the poorest, but not the financial system and the big business that moves all this along.”

With Britain having overtaken the US and Spain as the world’s biggest consumer of cocaine per capita, the Wachovia investigation showed much of the drug money is also laundered through the City of London, where the principal Wachovia whistleblower, Martin Woods, was based in the bank’s anti-laundering office. He was wrongfully dismissed after sounding the alarm.

Gaviria said: “We know that authorities in the US and UK know far more than they act upon. The authorities realise things about certain people they think are moving money for the drug trade – but the DEA [US Drugs Enforcement Administration] only acts on a fraction of what it knows.”

“It’s taboo to go after the big banks,” added Mejía. “It’s political suicide in this economic climate, because the amounts of money recycled are so high.”

 

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Flagstar pays $133M to settle mortgage fraud

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.

full article

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