by Michael Roberts
The banks and bankers that triggered or caused the global financial crash with their reckless drive for grotesque profits continue to get away with the consequences of their actions. The latest fine by US regulators on the Bank of America was a whopping $17bn. But, as has been pointed out by various bloggers and the Economist, it was not really so whopping. That’s because of the $17bn fine, for selling misleading mortgages to poor householders and distributing rubbish mortgage bonds to customers and investors, only $9bn is in cash. The rest is an amount reckoned to be equivalent to revising mortgages for householders in difficulty. That’s something that should have been done anyway by the banks. Instead, the US Justice department has done sweetheart deals with the banks so that they can count part of the fine as providing the service they ought to have done before.
The ratio of these corrections to cash is 89% in the case of the Bank of America deal; 44% for the JP Morgan fine of $13bn and 56% for the Citigroup deal of $7bn. The non-cash element keeps rising in every new deal. So it seems that bankers can avoid prosecution for offences that have devastated millions of livelihoods (loss of homes, jobs, savings etc) and can get a special deal with the authorities that increasingly does not involve even Read the rest of this entry »