Banks Too Big To Jail?
Elizabeth Warren questioned Treasury officials Thursday at a Senate Banking Committee about their failure to do more than give HSBC criminals a meaningless love tap after they were caught again and again financing international illicit drug cartels. She was blunt: "How many billions of dollars do you have to launder fro drug lords before somebody says, 'we're shutting you down'?" Even a senile old reactionary like Chuck Grassley (R-IA) is edging down the same path and he questioned Eric Holder about why the HSBC criminals haven't been arrested and tried for their crimes. Holder states clearly that these big banks are too big to hold accountable in any meaningful way. “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," Holder told Grassley. That wouldn't be a satisfactory answer coming from a Republican administration and it isn't a satisfactory response coming from the Obama administration. Bob Borosage, head of the Campaign for America's Future, called the argument "indefensible." He's correct. “Holder’s outrageous admission means that bankers operate-- and know they operate-- above the law... Holder’s admission makes action-- however improbable-- imperative. A nation of laws and markets cannot abide huge private financial institutions that are accountable to neither.”
HSBC paid a pathetic and meaningless fine last year for financing drug cartels and international terrorism. No one was charged with any crimes. The Obama Administration hasn't done squat. Senator Warren made it clear that she feels HSBC should have been prohibited from doing business in the U.S. and that the perps be tried as criminals. “If you’re caught with an ounce of cocaine," she posited to a Treasury regulator, "the chances are good you go to jail. If you’re caught repeatedly, you can go to jail for life. Incidentally, if you launder nearly a billion dollars in drug money, your company pays a fine and you go home and sleep in your own bed at night.”
Undersecretary of the Treasury David Cohen told Senator Warren he wouldn't answer hypothetical questions. Later Jeff Merkley (D-OR) had a crack at him and asked how they would explain to the American people why no HSBC officials faced criminal charges and whether they had played any role in Justice’s decision not to prosecute the bank or any of the employees who were responsible for the money laundering.
If a bank is too big to fail or jail, maybe it needs to be smaller.