Down the rabbit hole with the feds
A while back I griped about the failure of federal prosecutors to seek criminal charges against bankers and others who perpetrate financial crimes.
The Economist of May 4 reminds us that in Britain not one senior banker has faced criminal charges relating to the failure of his institution. In this country the Federal Deposit Insurance Corporation has filed more than 40 lawsuits against officers and directors of failed institutions since 2010, but while more such actions are expected, prosecutors have brought few criminal charges against high-profile bankers. (The American government, which spoent a trillion bucks to bring down Saddam Hussein, who posed no threat to this country, has to date secured only one conviction of a senior banker for marketing mortgage-backed securities that posed a very serious threat indeed.)
The magazine went on to recall how during our savings-and-loans crisis in the 1980s, more than 800 bankers were jailed. These days, as Sen. Elizabeth Warren learned recently, regulators won’t even answer questions about it. In March hearings before the Senate Banking Committee on enforcement of the Bank Secrecy Act of 1970 that requires U.S. financial institutions to help the feds prevent money laundering,Warren asked Jerome Powell, a governor of the Federal Reserve, under which circumstances he would have advised the Justice Department that HSBC’s laundering of $881 million for Mexican and Colombian drug cartels was an appropriate case for a criminal action.
Powell's answer must have left the senator thinking she had fallen down the rabbit hole. It’s appropriate to advise the Justice Department that such conduct is an appropriate case for a criminal action, he explained, when there’s a criminal conviction.