Tag Archives: Bank Regulations

Cash Is No Longer King: The Phasing Out of Physical Money Has Begun

By Shaun Bradley. Published 12-8-2016 by The Anti-Media

As physical currency around the world is increasingly phased out, the era where “cash is king” seems to be coming to an end. Countries like India and South Korea have chosen to limit access to physical money by law, and others are beginning to test digital blockchains for their central banks.

The war on cash isn’t going to be waged overnight, and showdowns will continue in any country where citizens turn to alternatives like precious metals or decentralized cryptocurrencies. Although this transition may feel like a natural progression into the digital age, the real motivation to go cashless is downright sinister. Continue reading

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Iceland, Where Bad Bankers Go to Jail, Finds Nine Guilty in Historic Case

Since its 2008 crisis, Iceland has received recognition for its strategy of prosecuting executives, letting banks go bust, and focusing on social welfare

By Nadia Prupis, staff writer for Common Dreams. Published 9-7-2016

The verdict from Iceland's Supreme Court overturns a June 2015 decision by the Reykjavik District Court, which found seven of the nine defendants guilty and acquitted two. (Photo: Daniel/flickr/cc)

The verdict from Iceland’s Supreme Court overturns a June 2015 decision by the Reykjavik District Court, which found seven of the nine defendants guilty and acquitted two. (Photo: Daniel/flickr/cc)

Iceland, which became a gold standard for corporate accountability in the wake of its 2008-2011 financial crisis, has found nine bankers guilty for market manipulation in one of the biggest cases of its kind in the country’s history.

The verdict from Iceland’s Supreme Court, issued Thursday, overturns a June 2015 decision by the Reykjavik District Court, which found seven of the nine defendants guilty and acquitted two. Continue reading

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So, You Thought Bank of America Would be Punished for Role in 2008 Crisis? Think Again

By Claire Bernish. Published 5-23-2016 by The Anti-Media

United States — In a reversal of the smidgen of accountability forced on Bank of America for its role in the 2008 financial crisis, a U.S. appeals court threw out a jury’s verdict — and with it, the $1.27 billion fine BoA would have paid for mortgage fraud.

Though the Department of Justice had alleged Countrywide Financial Corp., which was purchased by Bank of America in 2008, had sold Fannie Mae and Freddie Mac thousands of bad loans through its “Hustle” mortgage program, the Second Circuit Court of Appeals in New York found insufficient evidence to back charges of fraud. Continue reading

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Feds Helped Hide Investigation into Big Bank’s Money Laundering for Drug Cartels

By Carey Wedler. Published 2-2-2016 by The Anti-Media

Photo: Wikimedia Commons

Photo: Wikimedia Commons

A federal judge ruled last week that the Hong Kong and Shanghai Banking Corporation (HSBC) will be forced to share a report on its business practices with the public — a decision both the bank and the Department of Justice (DOJ) fought in court to prevent. The report is based on the findings of an ongoing government audit of the bank initiated amid revelations in 2012, that it laundered money for drug cartels and terrorist organizations.

When HSBC’s sordid dealings were discovered in 2012, the DOJ declined to press charges, arguing the bank was too important to prosecute. As the Guardian reported at the time, Assistant Attorney General Larry Breuer argued “the Justice Department had looked at the ‘collateral consequences’ to prosecuting the HSBC or taking away its US banking license. Such a move could have cost thousands of jobs, he said.” Continue reading

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Five Years Later, the Unfulfilled Promise of Dodd-Frank

Five years after the law’s enactment, fewer than two-thirds of its 390 rules have been completed

Written by Deirdre Fulton, staff writer for Common Dreams. Published 7-21-15.

Despite Dodd-Frank's stated goal of reining in reckless banking, Washington, D.C. regulators keep giving Wall Street the green light. (Photo: GLing526/flickr/cc)

Despite Dodd-Frank’s stated goal of reining in reckless banking, Washington, D.C. regulators keep giving Wall Street the green light. (Photo: GLing526/flickr/cc)

With several key promises of the Dodd-Frank Wall Street Reform and Consumer Protection Act still unfulfilled, “Americans cannot be comforted that Wall Street will not wreak havoc again,” according to a new report from the watchdog group Public Citizen.

“Five years after President Barack Obama signed this legislation, Dodd-Frank remains largely incomplete,” said Bartlett Naylor, Public Citizen’s financial policy advocate and author of the report, Dodd-Frank is Five: And Still Not Allowed Out of the House (pdf), published Tuesday.

“Major portions of the law have yet to be codified into specific rules,” Naylor explained. “Many enforcement dates are set well into the future, and certain rules are not yet being implemented and enforced to the fullest extent of the law.”

Dodd-Frank, signed into law five years ago Tuesday, “promised that America would never again be held hostage by banks that are too big to fail, but that promise remains unfulfilled,” Public Citizen said in a statement. “Instead, industry-captured regulators and members of Congress hungry for campaign contributions from Wall Street continue to delay and dilute the law.”

In fact, of the 390 rules required by the law, fewer than two-thirds have been completed; 60 rules have yet to be finalized, while another 83 have not even been proposed, according to a tally by law firm Davis Polk.

The report specifically looks at the status of key Dodd-Frank provisions including the Volcker Rule, which bans proprietary trading or short-term speculation; the “living will” stipulation empowering regulators to break up big banks that don’t provide a “credible” plan for an orderly resolution under the bankruptcy code should they fail; and restrictions on banker pay schemes that reward excessive risk-taking.

In all three areas, regulation has been stalled or stymied, Public Citizen declares—a reality the report attributes to the revolving door between Wall Street and Washington, D.C.

“Regulators and lawmakers who put Wall Street interests ahead of public interests aren’t fulfilling the law’s intent,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “Instead of rolling back key provisions, our officials should be taking full advantage of this important Wall Street reform law to protect Main Street financial markets.”

Of course, Public Citizen points out, “the Wall Street reform law, even if well implemented, was not a complete answer to financial challenges.”

As Campaign for America’s Future co-director Robert Borosage wrote in an op-ed on Tuesday:

The banks still “frankly own the place,” in Sen. Richard Durbin’s immortal words, Sen. Elizabeth Warren has only begun to unveil the revolving door between Wall Street and it regulators that often neuters the law. Wall Street continues to deploy legions of lobbyists to avoid sensible regulation. It remains the leading source of dough for the leading presidential candidates in both parties. The Wall Street Journal reports that in the first month of reporting, Clinton raised about $300,000 from people working in the six biggest banks, while Bush pocketed $144,000 from Goldman Sachs employees alone. And that’s not counting the big money donations for their superPACs.

“That’s why all progressives should be pushing for greater reforms,” Borosage wrote, “even while fending off efforts of the bank lobby to cripple the Consumer Financial Protection Bureau, to cut budgets of regulatory agencies, and to weaken or repeal core elements of Dodd-Frank.”

Sen. Elizabeth Warren, who has decried recent attempts to water down Dodd-Frank, spoke with the advocacy group Americans for Financial Reform about the legislation in an interview published Tuesday:

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To Counter Rise of Oligarchy, Sanders Pitches Progressive Economic Vision

By Jon Queally, Common Dreams Staff Writer

In a speech on the Senate floor on Tuesday morning, Sen. Bernie Sanders (I-Vt.) introduced his vision for a progressive economic agenda that he says could restore shared prosperity, reinvigorate the middle class, and mitigate a host of social crises that stem from the current system that has created great wealth for a select few while systematically eroding the quality of life for the many.

“Are we prepared to take on the enormous economic and political power of the billionaire class or do we continue to slide into economic and political oligarchy?” —Sen. Bernie Sanders (I-Vt.)

Detailing twelve economic areas that need immediate attention and major overhauls, Sanders indicated his plan is  driven by the need to re-establish the status of the middle class as the key indicator of overall economic health.

Continue reading

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Legislation They Can Bank On

Looking West-Northwest at Citigroup Center, New-York. Photo by Johan Burati [Public domain], via Wikimedia Commons

Looking West-Northwest at Citigroup Center, New-York. Photo by Johan Burati [Public domain], via Wikimedia Commons

We have all heard of Bernie Madoff and his now infamous ponzi scheme which bilked millions of dollars in assets from unsuspecting investors, most of whom lost their life savings and security as they entered their “golden” retirement years. The fallout from the crime still reaches into society today. Americans are tired of not seeing justice brought to those responsible. But Bernie’s in prison, so everything is as it should be again, right?

Not so fast, and not so easy. Remember that JP Morgan Chase was fined $13 billion by the US government for their part in practices leading to the financial crisis. And how are they connected to Madoff? Madoff ran his bogus investments through accounts at JP Morgan Chase, which led to an account manager noticing unusual activity.  JPMorgan filed a report with U.K. regulators in October 2008 that famously described Madoff’s returns as “too good to be true.” But JPMorgan never filed a corresponding report with U.S. regulators.  In January, 2014, JP Morgan Chase reached a $1.7 billion dollar settlement to resolve the criminal charges related to Madoff.

Monday, July 14, Citibank followed the tradition, with a Department of Justice settlement of a $7 billion fine, the result of an investigation into Citi’s defrauding of investors with mortgage securities leading up to the financial crisis. Yet, as we may feel some small degree of an ah-ha moment by knowing Citi was fined, one must remember they also posted their earning reports the same day which showed higher than expected returns for the cycle. By posting the same day as the fine is announced, Citi is preempting the need for damage control by inferring assurances that not even these fines can damper their profitable way of doing business.

To his credit, US Attorney General Eric Holder stated that this settlement in no way releases the parties from possible future criminal prosecutions. We wonder how long we will wait to see if he will make good on his inference of justice to be served.

And why are these banks so self-assured that they are untouchable?

In May of 2013, the New York Times reported lobbyists activities in Washington that showed CitiGroup lobbyists directly involved in the actual drafting of legislation that oversees banking regulations. “In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)” states a report in DealBook,

So what we have here are people who choose to disregard laws and regulations in pursuit of huge profits and mega bonuses. When laws and inconvenient factors such as the Department of Justice gets in their way, they simply go to Washington and draft new rules that they bribe lobby Congressional members to pass as law. When the American public first caught wind of what was going on, they convinced the Supreme Court that they had rights as corporations, because they are people too. SCOTUS agreed with them in the Citizens United ruling, which has opened the floodgate to the demise of democracy and the birth of plutocracy.

When the fox is left in charge of the hen house, it is a matter of time
before the chickens are all devoured.

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