The Greatest Triumph of the Banking Industry

“The greatest triumph of the banking industry wasn’t ATMs or even depositing a check via the camera of your mobile phone. It was convincing Treasury and Justice Department officials that prosecuting bankers for their crimes would destabilize the global economy.”

-Barry Ritholtz


I have the above quote in a piece by Dan Gross in the Daily Beast this week. The very next line (which did not make it to print) is “It was a license to steal, and its one they have exploited relentlessly.”

Dan goes on to add:

“From the beginning of the financial scandal, there has been a noticeable lack of criminal prosecution at the largest institutions. Yes, the Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York have cracked down on insider trading, and have sent scores of people to jail for illicit schemes that may have netted tens or a few hundred million dollars. . . . But that’s small change compared with the damage inflicted in the mortgage and LIBOR scandals.

A pretty clear rule of thumb has emerged: if you work at a well-known, large, systematically important financial institution, you may lose your bonus—but not your freedom. Simply put, authorities in the U.K., Switzerland, and the U.S. are not eager or willing to pursue banks to the fullest extent of the law. The trauma of the Lehman Brothers collapse has caused prosecutors around the world to treat banks with kid gloves. And that may be the greatest scandal stemming from the fall of 2008. (Emphasis added)

The full piece is worth a read.



Why Do Banks Get Away With Murder?
Dan Gross
Daily Beast, February 7, 2013

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