Politics Magazine

Why Aren't These Bankers In Jail ?

Posted on the 21 May 2015 by Jobsanger
Why Aren't These Bankers In Jail ? Once again we hear of fines being levied against some of the giant banks for illegal (criminal) activity. The following is part of an article from The Huffington Post:
The age of multibillion-dollar bank fines with no admission of wrongdoing is over. The Justice Department announced Wednesday morning that five banks pleaded guilty to market manipulation, while also paying billions of dollars in fines. 

Barclays, Citigroup, J.P. Morgan and the Royal Bank of Scotland admitted to illegally distorting foreign exchange markets. The banks formed what they called "The Cartel" and aimed to set a key currency marker, known as "the fix," at mutually beneficial values. 

The fix is set every day at 4 p.m. London time and is used in the more than $5 trillion currency market to determine the price of trades and the value of large institutional holdings. Traders at the banks used instant messaging chat rooms to discuss where to set the fix.

In addition to admitting guilt, the banks will also pay fines. Barclays will pay $650 million, Citigroup $925, million J.P. Morgan $550 million and RBS $395 million. Barclays will pay another $1.3 billion to New York State, federal and U.K. regulators.

The Justice Department said it was charging the banks' parent companies because the wrongdoing was pervasive, and that the banks' punishment was "fitting considering the long-running and egregious nature of their anticompetitive conduct." To put the fines in context, in 2014, Barclay's net income was $3.5 billion, Citigroup's was $7.3 billion, J.P. Morgan's was $21.8 billion and RBS' was $3.9 billion.

Will this stop the giant banks from engaging in criminal activity? After all, aren't those fines large enough to hurt those banks? Sadly, the answer to both of those questions is NO. While the fines might sound big to us normal Americans, they are not that large to these banks. The truth is that the fines don't even cover the amount of money the banks stole -- meaning the banks still are turning a profit off that criminal activity.
This is far from the first time the giant banks have been caught engaging in illegal activities to fatten their already enormous profits. And why shouldn't they continue to do that? If they are not caught, they get huge profits from that criminal behavior -- and if they are caught (like they were this time), they still profit from the illegal acts (just not as much as if they hadn't been caught). In other words, there is no reason for them to stop stealing.
So, how can we stop this illegal banking activity? I believe it would require at least two things:
1. Make the fines big enough to more than cover the money made from the illegal behavior. I would suggest something like 20% to 30% more than they earned from the criminal behavior.
2. Send the CEO and the CFO of any banks found to be engaging in criminal activity to prison for at least ten years (and anyone else in the bank found to be participating in that criminal behavior).
You can be sure that if you or I stole from one of these banks we would be sent to prison. Why shouldn't the same thing apply when the banks steal? No bank or banker should be to big to pay for their crimes.
(Note -- the cartoon image above was found at the website of the Western Rifle Shooters Association.)

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