Some banks 'too big to jail'? Maybe yes, attorney general says
An amazing exchange between a senator and U.S. Attorney General Eric Holder.
Some banks 'too big to jail'? Maybe yes, attorney general says
Jeff Gelles, Inquirer Business Columnist
Need another reason to believe that we should move to break up the United States' "too big to fail" mega-banks? Consider this amazing exchange, transcribed here by the American Banker, between U.S, Senator Chuck Grassley (R., Iowa) and Attorney General Eric Holder. During a Senate Banking Committee hearing, Grassley suggests that some of those same banks are "too big to jail," and Holder essentially agrees. Yes, he says, concerns about systemic risk may mean that some banks are able to avoid potential prosecution:
Sen. Chuck Grassley, R-Iowa: In the case of bank prosecution. I'm concerned we have a mentality of 'too big to jail' in the financial sector, spreading from fraud cases to terrorist financing to money laundering cases. I would cite HSBC.
I think we are on a slippery slope and that's background for this question. I don't have recollection of DOJ prosecuting any high-profile financial criminal convictions in either companies or individuals.
Assistant Attorney General Breuer said that one reason that DOJ has not sought these prosecutions is because it reaches out to 'experts' to see what effect the prosecution will have on the financial markets. On Jan. 29, Sen. [Sherrod] Brown and I requested details on who these so-called 'experts' are. So far we have not received any information. Maybe you're going to but why have we not yet been provided the names of experts the DOJ consults as we requested on Jan. 29? We continue to find out why we aren't having these high-profile cases...
Attorney General Eric Holder: We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC.
Just putting that aside for a minute though, the concern that you have raised is one that I, frankly, share. I'm not talking about HSBC here, that would be inappropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large.
Again, I'm not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate. I think that's something that we — you all [Congress] — need to consider. The concern that you raised is actually one that I share.
This may be the latest example of a "Kinsley gaffe" - a situation where a politician accidentally acknowledges an uncomfortable truth. It's not really a surprise - the phrase has come up before in the HSBC case. But it's almost shocking nonetheless.
When our nation's top law-enforcement officer acknowledges that our laws may be unenforceable against our most powerful financial institutions, it's a powerful argument, all by itself, for revisiting the question of a mega-bank breakup that we were, perhaps understandably, reluctant to face at the depths of the financial crisis.
You can also watch the exchange on YouTube here:
What a crock. Sure one or two guys leaving a company would cripple it. Candidate Obama said he would hold people accountable. President Obama is just as crooked as the bankers. Instead he used the big banks to help him further his agenda. I guess that was the deal. Help me and I won't prosecute you.— Phillies2008WSChamps- The net here is this people. In 1913 when the Central Bank was created at the behest of Rockefeller, Morgan, Rothschilds, etc...they created a banking cartel to rule the world (kind of like OPEC rules the oil world).
Today, thanks to fractional banking, banks are now so big and powerful they control governments and people. The choose winners and losers simply by who they choose to "finance".
Imagine if the bankers of the world stopped funding Washington? Could you imagine being THAT President?!?
Makes you wonder why the Central Bank financed Bush's 2 wars and now is financing Obama's economic disasters...
The last President to openly challenge the Central Bank's authority.....JFK.— Professor1982 - Here you go Libs, all the crying about the thieves on Wall Street getting away with what they did and Obama won't do anything. Just more of the same, no matter what party is in power.— Taxpaying Voter
- Lesson to be learned: Get too big that you can break laws and get away with it.— ej610
- exactly. — Professor1982
- Jack Lew, the new Treasurer, had investments in the Cayman Islands. Geithner was a tax cheat and head of the NY Fed, one of the worse enablers of Goldman Sachs, and Wall Street in general. A power corridor runs from Wall Street to DC and it runs independent of part affiliation. Robert Rubin, under Clinton, killed Glass Steagall which lead to our economic crash. Greenspan served many Presidents and he was the main villian in the housing crash. Rubin is Dem, Greenspan a Repub. In the Hamptons, nobody cares how you vote.— Themonkofmagdalena
- Sad but true. Party affiliation is largely a set of claws for the howling masses to tear each other apart with while the fat cats skate above the chaos (and oftentimes profit from it). When Obama appointed Geithner, my first thought was, "Meet the new boss, same as the old boss." The GOP, being the party of the bats**t crazy, is no alternative but in terms of the rich getting richer, there's not a whole lot of space between the parties. — Last Man Standing
- Eric Holder seems to be too big to jail as well.— Mr. Smith
- Holder defended banks as a lawyer and the grandstanded as a champion of the so called victims in a settlement over predatory lending. What a race card playing two faced poser.This guy makes that toolbox Ed Meese look good and that is pretty hard to do. Nice job Mr. Holder.— big.minghia
- pigs at the trough— box297
- I am happy to see that some of the blogs finally acknowledge the fact that neither party is to be trusted. I am sick
and tired of hearing the democrats say "that they are protecting the middle class" when in fact they are just as corrupt
as the republicans.— Princess of the city - Since our monetary system is based on commercial banks, they should be carefully regulated. Letting them merge with investment banks was an obvious failure of government. As for their size, that is another problem. Too many small community banks have been absorbed by the big banks. That is bad for small and medium size businesses, and is a major problem in the current economy. Years ago, banks were completely limited to one state. Then it was expanded to adjoining states. Then, it became nationwide. Then you have too big to fail - and too big to jail.— Falls Ed
-1.jpg)
With all their drug money laundering they should be put away for life and all debt forgiven to those consumers who owe them any money.
Beppe Grillo's platform in Italy:
• unilateral default on the public debt;
• nationalization of the banks; and
• a guaranteed “citizenship” income of 1000 euros a month.
The taxpayers should not have to sacrifice infrastructure, services, safety, and security in order to pay INTEREST to a private banking cartel. Austerity will not work in Europe, and it will not work here either; especially when the austerity is a result of debt to private banks that for some incomprehensible reason have been granted the power to create money.— jp8899- Congressmen, senators, Government bureacrats, the legal system all corrupt scumbags. Pigs in power the US is done.— johduk
Reach Jeff at jgelles@phillynews.com.
