Is the British State Complicit in World’s Largest Systemic Fraud?

Five years ago it emerged that the LIBOR interest rates, the world’s most influential and important financial benchmark, were rigged. New revelations suggest that not only was this fraud a systemic practice by big banks, but Bank of England and the government in Westminster were also in on the big fix.

What is LIBOR?

The London Interbank Offering Rate is an interest rate based supposedly on the rates banks will lend money to each other, set on a daily basis. LIBOR directly impacts over $350 trillion in worldwide financial products. If you have a mortgage, student loan or other financial tie, these products are likely tied to the rate. Local councils’ and public organisations’ financial investments are determined by LIBOR. It affects everything.

To manipulate the rate, banks gave false rates, higher or lower than they would actually lend money for. Rate-setters were influenced by traders who had bets on the rate going a certain way; these traders made fortunes for themselves and the banks, returning the favor in extravagant holidays and other gifts. On the other side of the equation, unsuspecting customers, institutions and the public lost out.

The bankers even rigged LIBOR to cash in even more from the bank bailout. In 2012, Timothy Geithner the U.S. Treasury Secretary, admitted that banks rigged the U.S. bank bailout. Lloyds of London was fined for rigging the rate connected to its U.K. state assistance. The LIBOR rigging alone could be grounds to declare the bank bailouts illegal.
Not Just “a Few Bad Apples”

One of the over-arching myths surrounding the LIBOR rigging was that it was caused by a few bad apples. This narrative was the same one pushed when the whole financial world crashed a few years previously. But the more we understand about both LIBOR and the financial crash, the more blatant is the evidence of systemic, wholesale corruption throughout the financial industry.

Since the LIBOR scandal broke, only a few low-ranking traders from UBS, Citigroup and Barclays have found themselves in jail, among them Tom Hayes, who was sentenced to 14 years. Yet to this day, none the top bankers have joined them. Equally disturbing, the banks fined for rigging the rate have only been forced to pay out in the hundreds of millions. This amounts to loose change for the LIBOR fraud and profiteering that they successfully undertook.
Fraud From on High

Earlier this month, a BBC Panorama documentary further lifted the lid on the scandal by releasing a telephone recording made between Mark Dearlove and Peter Johnson. Dearlove headed Barclays Japan, and Johnson was a LIBOR submitter responsible for giving an interbank offering figure for the bank.

In the recording, which took place Oct. 29, 2008, Dearlove said: “The bottom line is you’re going to absolutely hate this… but we’ve had some very serious pressure from the U.K. government and the Bank of England about pushing our Libors lower.”

Johnson, who is now serving four years for LIBOR fixing, objected to the request for legal reasons. To this, Dearlove replied, “The fact of the matter is we’ve got the Bank of England, all sorts of people involved in the whole thing… I am as reluctant as you are… these guys have just turned around and said just do it.”

Dearlove is currently under investigation by the U.K. Serious Fraud Office.

The same day as that phone call was made, Paul Tucker, Executive Director at the Bank of England, called Bob Diamond, chief of Barclays. The BBC reported that LIBOR was also discussed on this call.

These allegations contradict claims made by both Diamond and Tucker to Parliament that they were unaware of lowballing, that is, setting LIBOR interest rates lower to give the impression that the bank was healthier during the financial crash. Lowballing, just like inflating LIBOR rates, gave traders the chance to cash in.

In response, the Bank of England said that LIBOR and other global benchmarks “were not regulated in the U.K. or elsewhere during the period in question” and that they would help the Serious Fraud Office with their enquires.

By not denying the allegations, the Bank of England effectively admitted it was complicit in fixing LIBOR. Presumably the bank’s motivation was to give a false impression that might steady the collapsing economic system. It’s actions also enabled and condoned further systemic profiteering.

Conservative Party Complicity

The new revelations serve only to further tarnish the argument that this was all the work of some rogue traders. As reported in 2013, LIBOR rigging charges have also been levied against members at the top of the U.K. Conservative Party.

ICAP, the FTSE 250 trading and bank brokerage firm, was described in late 2013 as a “lynchpin” in the LIBOR scam, where low level employees have been found guilty of rate rigging. ICAP is run by the Conservative Party’s former top treasurer and donor, Michael Spencer. Spencer, who was not charged for a role in LIBOR, nonetheless adamantly pushed the “rotten apples” narrative.

Another strong connection between LIBOR and the Conservatives is Angela Knight, a former MP (1992-97) and prominent figure in the London. She was Chief Executive of the British Banker’s Association, a lobby group for banks, and kept her knowledge about LIBOR rigging secret since 2005. The truth spilled out once she spun back through the revolving door and became the government’s tax advisor in 2016.

As Knight’s experience showed, the way that bankers move from being politicians to regulators and back again speaks volumes about why LIBOR and other systemic fraud often remain unresolved. Where there is no political will, there is no way. The City of London and the Conservative Party are not only connected via the revolving door: the city in fact bankrolls the party and has become its main donor in the years since the financial crash.

In opposition, the Labour Party has called for an open public enquiry into LIBOR rigging – demands that have become all the more urgent with a forthcoming snap election called by Theresa May last week. Shadow Chancellor of the Exchequer John McDonnel said of the enquiry: “It is essential that we clarify who took the decisions to rig the Libor index, and when, so that the schools, NHS hospitals and local councils that lost out can be paid the compensation that is rightfully due and public confidence in our banking system and official institutions can be restored.”

— source by Steve Rushton

Two Thirds of Lenders Using Underhand Tactics For Consumer Loans

Around 1 in 10 people taking out a loan in Britain do so simply to make ends meet. The market for these loans is extremely unfair – and this is not coming from a consumer pressure group but from one of the bigger banks, TSB.

On BBC 4 Radio this morning, Chief Executive Paul Pester of TSB suggested they had conducted a study of the market for household lending. The results were quite revealing, Pester suggested that about two-thirds of loan providers are using underhand tactics, unnecessarily costing UK consumers around £400 million.

According to Pester, its extremely difficult for customers to understand what they get when they buy a loan. Most of the time borrowers don’t understand what happens if they pay off their loans early and how much it will cost them.

Moreover, Pester said that borrowers can’t switch their loan after a couple of years if they see other lenders that provide better rates – there is no switching service.

However, what was more shocking to the chief executive was that the more a borrower shops around for a good loan deal, the more it is likely to cost them!

This is because the more astute borrower may want to look around for the best loan deal. However, this often leaves a hard credit footprint on the borrower’s credit profile – which means lenders will most likely charge the borrower a higher rate.

According to Pester, two-thirds of loan providers will effectively leave a footprint on your credit profile you simply ask about the price of a loan. Indeed, the mark on the profile makes it seem like you have taken the loan out!

In sum, borrowers struggling to make ends meet, ending up paying more if they do the sensible thing of shopping for the best loan deals. Pester estimates that this ends up unnecessarily costing UK consumers an extra £400 million every year.

For an economy that is systemically dependent on household debt, this type of behaviour by the banking sector is not surprising. The level of consumer debt to household income is reaching worrying levels, and those on the lowest incomes are being punished for shopping for the best loan deals.

The main policy solution to these problems is to encourage households to take on even more debt. Instead, at Positive Money we believe the Bank of England should to cooperate with the Treasury in order to finance a fiscal stimulus with newly created money (for more information click here).

Most importantly, this would increase people’s incomes without households having to take on more debt! We would be less dependent consumer debt, and less susceptible to these types of underhand tactics.

— source by Frank Van Lerven

What a State-Owned Bank Can Do for New Jersey

Phil Murphy, the leading Democratic candidate for governor of New Jersey, has made a state-owned bank a centerpiece of his campaign. He says the New Jersey bank would “take money out of Wall Street and put it to work for New Jersey – creating jobs and growing the economy [by] using state deposits to finance local investments … and … support billions of dollars of critical investments in infrastructure, small businesses, and student loans – saving our residents money and returning all profits to the taxpayers.”

A former Wall Street banker himself, Murphy knows how banking works. But in an April 7 op-ed in The New Jersey Spotlight, former New Jersey state treasurer Andrew Sidamon-Eristoff questioned the need for a state-owned bank and raised the issue of risk. This post is in response to those arguments, including a short refresher on the stellar model of the Bank of North Dakota (BND), currently the nation’s only state-owned depository bank.

Which Is Safer, a Public Bank or a Private Bank?

Sidamon-Eristoff warns, “[W]e need to remember that a public bank would be lending the state’s operating cash balances – we’re not talking about an enormous pool of unused, unencumbered cash – and that any repayment shortfalls or liquidity restrictions could potentially impact the availability of funds for employee salaries and other regular operating expenses.”

As the Bank of England recently confirmed, however, banks do not actually lend their deposits. The deposits at all times remain in the bank, available for withdrawal. They are no less available to the state when deposited in its own bank than in Bank of America. In fact, they are more at risk in Bank of America and other Wall Street banks, which with the repeal of Glass-Steagall are allowed to commingle their funds. That means they can gamble with their deposits in derivatives and other risky ventures, something a transparent and accountable state-owned bank would not be allowed to do.

Today, government deposits are at risk in private banks for another reason. Banks across the country are telling governments of all sizes that they can no longer provide the collateral required to fully protect these deposits while paying a competitive interest rate on them, due to heightened regulatory requirements. FDIC insurance covers only the first $250,000 of these deposits, a sum government revenues far exceed. The bulk of these deposits are thus left insufficiently protected against a banking collapse like that seen in 2008-09—something that is widely predicted to happen again.

In North Dakota, by contrast, state revenues are deposited by law in the state-owned Bank of North Dakota and are guaranteed by the state. The BND pays a competitive interest rate on these deposits that is generally at about the midpoint of rates paid by other banks in the state. The BND, in turn, guarantees municipal government deposits, which are generally reserved for local banks. Unlike in other states, where local banks must back public deposits with collateral to an extent that makes the funds largely unavailable for lending, North Dakota’s community banks are able to use their municipal government deposits to back loans because the BND provides letters of credit guaranteeing them.

The concern that a New Jersey state-owned bank might make risky loans can be obviated by limiting lending, at least initially, to the same sorts of loans the state makes now, using the same underwriting standards. Sidamon-Eristoff observes that “the state already maintains a comprehensive range of economic development, infrastructure finance, housing finance, and student assistance programs.” What financing through the state’s own bank would add is leverage. State and local governments routinely make loans through revolving funds, in which the money has to be there before it can be lent out and must come back before it is lent again. Chartered depository banks are allowed to leverage their capital into 10 times that sum (or more) in loans, acquiring the liquidity for withdrawals as needed from the wholesale markets (Fed funds, the repo market or the Federal Home Loan Banks). A bank with adequate capital will lend to any creditworthy borrower, without first checking its deposits or its reserves. If the bank has insufficient reserves, it can borrow from a variety of cheap sources that are normally the exclusive province of the banking club, but that local governments and communities can tap into by owning their own banks.

That is one of the major benefits to the state of having its own bank: it can borrow very cheaply in the money markets. It can get the sort of Wall Street perks not otherwise available to governments, businesses, or individuals; and it is backstopped by the Federal Reserve system if it runs short of funds. This is the magic that allows banks to be so profitable, and it is what makes a publicly-owned bank exceptionally useful at state and local levels of government.

Cutting the Cost of Infrastructure in Half

Consider the possibilities, for example, for funding infrastructure. Like most states today, New Jersey suffers from serious budget problems, limiting its ability to make needed improvements. By funding infrastructure through its own bank, the state can cut infrastructure costs roughly in half, since 50 percent of the cost of infrastructure, on average, is financing. Again, a state-owned bank can do this by leveraging its capital, with any shortfall covered very cheaply in the wholesale markets. In effect, the state can borrow at bankers’ rates of 1 percent or less, rather than at market rates of 4 to 6 percent for taxable infrastructure bonds (not to mention the roughly 12 percent return expected by private equity investors). The state can borrow at 1 percent and turn a profit even if it lends for local development at only 2 percent—one-half to two-thirds below bond market rates.

That is the rate at which North Dakota lends for infrastructure. In 2015, the state legislature established a BND Infrastructure Loan Fund program that made $150 million available to local communities for a wide variety of infrastructure needs. These loans have a 2 percent fixed interest rate and a term of up to 30 years; and the 2 percent goes back to the State of North Dakota, so it’s a win-win-win for local residents.

The BND is able to make these cheap loans while still turning a tidy profit because its costs are very low: no exorbitantly-paid executives; no bonuses, fees, or commissions; very low borrowing costs; no need for multiple branch offices; no FDIC insurance premiums; no private shareholders. Profits are recycled back into the bank, the state and the community.

In November 2014, The Wall Street Journal reported that the BND was actually more profitable than the largest Wall Street banks, with a return on equity that was 70 percent greater than for JPMorgan Chase and Goldman Sachs. This remarkable performance was attributed to the state’s oil boom; but the boom has now become an oil bust, yet the BND’s profits continue to climb. In its latest annual report, published in April 2016, the bank boasted its most profitable year ever. The BND has had record profits for the last 12 years, each year outperforming the last. In 2015 it reported $130.7 million in earnings, total assets of $7.4 billion, capital of $749 million, and a return on equity of a whopping 18.1 percent.

The BND Partners, Not Competes, with Local Banks

Sidamon-Eristoff argues that “a new public bank would inevitably compete against New Jersey’s private banks for routine business.” But the BND does not compete with private banks either for municipal deposits or for loans. Rather, it partners with local banks, participating in their loans. The local bank acts as the front office dealing directly with customers. The BND acts more like a “bankers’ bank,” helping with liquidity and capital requirements. By partnering with the BND, local banks can take on projects in which Wall Street has no interest, projects that might otherwise go unfunded, including loans for local infrastructure.

The BND helps local private banks in other ways. It acts as a mini-Fed for the state, providing correspondent banking services to virtually every financial institution in North Dakota. It offers secured and unsecured federal funds lines to over 100 financial institutions, along with check-clearing, cash management and automated clearing house services. Because it assists local banks with mortgages and guarantees their loans, local banks have been able to keep loans on their books rather than selling them to investors to meet capital requirements, allowing them to avoid the subprime and securitization debacles.

Due to this amicable relationship, the North Dakota Bankers’ Association endorses the BND as a partner rather than a competitor of the state’s private banks. Indeed, it may be the BND that ultimately saves local North Dakota banks from extinction as the number of banks in the US steadily shrinks. North Dakota has more banks per capita than any other state.

Bolstering the State’s Budget

The BND also helps directly with state government funding as needed. Between 2009 and 2016, the BND retained its profits because the state did not need them and the bank needed the additional capital for its rapidly expanding loan portfolio. But in December 2016, Governor Jack Dalrymple proposed returning $200 million from the bank’s profits to the state’s general fund, to help make up for a budget shortfall caused by collapsing oil and soybean proceeds. Dalrymple commented, “Our economic advisers have told us there is no similar state in the nation that could have weathered such a collapse in commodity prices without serious impacts on their financial condition.”

The BND also served as a rainy day fund when the state went over-budget in 2001-02 due to the dot-com bust. The bank simply declared an extra dividend for the state, and the next year the budget was back on track: no massive debt accumulation, no Wall Street bid-rigging, no fraudulent interest-rate swaps, no capital appreciation bonds at 300% interest.

Having a cheap and ready credit line with the state’s own bank can have similar benefits for New Jersey and other states. It can reduce the need for wasteful rainy-day funds invested at minimal interest in out-of-state banks; allow the state to leverage its funds, expanding its current credit facilities without adding to the state’s debt burden; cut infrastructure costs nearly in half; and jumpstart the economy with new development, new employment, and an expanded tax base.

— source

Here’s Why Italy’s Banking Crisis Has Gone Off the Radar

For a country that is on the brink of a gargantuan public bailout of its toxic-loan riddled banking sector, or failing that, a full-blown financial crisis that could bring down the European financial system, things are eerily quiet in Italy these days. It’s almost as if the more serious the crisis gets, the less we hear about it — otherwise, investors and voters might get spooked. And elections are coming up.

But an article published in the financial section of Italian daily Il Sole lays out just how serious the situation has become. According to new research by Italian investment bank Mediobanca, 114 of the close to 500 banks in Italy have “Texas Ratios” of over 100%. The Texas Ratio, or TR, is calculated by dividing the total value of a bank’s non-performing loans by its tangible book value plus reserves — or as American money manager Steve Eisman put it, “all the bad stuff divided by the money you have to pay for all the bad stuff.”

If the TR is over 100%, the bank doesn’t have enough money “pay for all the bad stuff.” Hence, banks tend to fail when the ratio surpasses 100%. In Italy there are 114 of them. Of them, 24 have ratios of over 200%.

Granted, many of the banks in question are small local or regional savings banks with tens or hundreds of millions of euros in assets. These are not systemically important institutions and can be resolved without causing disturbances to the broader system. But the list also includes many of Italy’s biggest banks which certainly are systemically important to Italy, some of which have Texas Ratios of over 200%. Top of the list, predictably, is Monte dei Paschi di Siena, with €169 billion in assets and a TR of 269%.

Next up is Veneto Banca, with €33 billion in assets and a TR of 239%. This is the bank that, together with Banco Popolare di Vicenza (assets: €39 billion, TR: 210%), was supposed to have been saved last year by an intervention from government-sponsored, privately funded bank bailout fund Atlante, but which now urgently requires more public funds. Their combined assets place them seventh on the list of Italy’s largest banks.

Some experts, including the U.S. bank hired last year to save MPS, JP Morgan Chase, have warned that Popolare di Vicenza and Veneto Banca will not be eligible for a bailout since they are not regarded as systemically important enough. This prompted investors to remove funds from the banks, further exacerbating their financial woes. According to sources in Rome, the two banks’ failure would send shock waves through the wider Italian financial industry.

There are other major Italian banks with Texas Ratios well in excess of 100%. They include:

Banco Popolare (the offspring of a merger of Banco Popolare di Verona e Novara and Banca Popolare Italiana in 2017 and then a subsequent merger with Banca Popolare di Milano on 1 January 2017): €120 billion in assets; TR: 217%.
UBI Banca: €117 billion in assets; TR: 117%
Banca Nazionale del Lavoro: €77 billion in assets; TR: 113%
Banco Popolare Dell’ Emilia Romagna: €61 billion in assets; TR: 140%
Banca Carige: €30 billion in assets; TR: 165%
Unipol Banca: €11 billion in assets; TR: 380%

In sum, almost all of Italy’s largest banking groups, with the exception of Unicredit, Intesa Sao Paolo and Mediobanca itself, have Texas Ratios well in excess of 100%.

But, as Eisman recently pointed out, the two largest banks, Unicredit and Intesa Sanpaolo, have TRs of over 90%. As long as the other banks continue to languish in their current zombified state, they will continue to drag down the two bigger banks. And if either Unicredit or Intesa begin to wobble, the bets are off.

To stay on the right side of the solvency threshold, Unicredit has already had to raise €13 billion of new capital this year and last week it took advantage of the ECB’s latest splurge of charitable lending (formally known as TLTRO II) to borrow €24 billion of free money. But as long as the financial health of the banks all around it continues to deteriorate, staying upright is going to be a tough order.

This is where things get complicated. In order to qualify for public assistance, banks must be solvent. Presumably, that would automatically disqualify any bank with a Texas Ratio of over 150%, which includes MPS, Banco Popolare, Popolare di Vicenza, Veneto Banca, Banca Carige and Unipol Banca. The bailout must also comply with current EU regulations including the Bank Recovery and Resolution Directive of Jan 1, 2016, which specifically mandates that before public funds are injected into a bank, shareholders and creditors must be bailed in for a minimum amount of 8% of total liabilities, as famously happened in the rescue of Cyprus’ banking system in 2013.

The Italian government knows that this approach could end up wiping out retail investors (otherwise known as voters) who were missold, in many cases fraudulently, subordinated bonds by cash-hungry banks in the wake of the last crisis, in turn wiping out the government’s votes. To avoid such an outcome, the government has proposed compensating those retail bondholders with public funds, just as the Spanish government did with the holders of preferente bonds. Which, of course, is in direct contravention of EU laws.

So far, the European Commission has stayed silent on the issue, presumably in the hope that the resolution of Italy’s financial sector can be held off until at least after the French elections in late April, if not the German elections in September. Then, if those elections go Brussels’ way, a continent-wide taxpayer funded bailout of banks’ NPLs can be unleashed, as already requested by ECB Vice President Vitor Constancio and European Banking Authority President Andrea Enria.

— source

Trump Wants to Gut Protections for Bank Customers

With Wall Street as greedy as it ever was, and the Trump administration seeking to ditch banking restrictions enacted in 2008 to protect the little people, a handful of cities are considering a do-it-yourself alternative: Public banking is just what it sounds like—financial institutions owned and operated by a government entity. Officials in Philadelphia and Oakland, California, are taking a hard look at the idea, and Santa Fe, New Mexico, has done a feasibility study that concluded a city-run bank would benefit the community, socially and economically. If done right, the report found, the bank would create a “robust local lending climate” and bring in millions of dollars per year in revenue.

There are already successful public banks in France, Germany, Japan, Switzerland, the United Kingdom, and elsewhere. There’s even a robust American model: North Dakota has had a state-run bank for nearly a century. Although created by socialists, the Bank of North Dakota retains ironclad support among the red state’s residents, many of whom credit it for helping North Dakota weather the 2008 financial crisis. Moreover, from 1910 to 1966, US post offices operated as de facto public banks where people could deposit and borrow small sums.

Leading the push in Oakland are progressive City Council members Rebecca Kaplan and Dan Kalb. “Public banking can give us a bank that is more responsive to the needs of the community,” Kaplan told me, “rather than prioritizing the needs of shareholders who don’t live in our community or the needs of corporate profit.”

Kaplan says there are two key reasons Oakland should pursue public banking. The first is that it can help low-income people—and especially people of color who may face discrimination at corporate banks—secure loans at a fair rate. “Oakland has long suffered from redlining,” Kaplan points out, and for-profit institutions can’t necessarily be trusted to refrain from discriminatory tactics.

The other big impetus, Kaplan says, is to give local pot entrepreneurs a safe place to stash their cash—literally. “We have a large and growing cannabis industry which has been kept out of traditional banks,” she says, “and so getting them access to banking so they don’t have to work in cash would be very helpful.” Dispensaries and future cannabis sellers (recreational pot won’t be legal officially until 2018) won’t have to worry so much about getting robbed, and all that capital could go a long way in helping a city bank get established.

“The beauty is that you could really tailor a public bank to target whatever a community’s needs are,” says Mehrsa Baradaran, a law professor at the University of Georgia and author of How the Other Half Banks. Baradaran, who worked on Wall Street for a decade, explains that the major banks are bad at meeting community needs because their end goal is “not to benefit the people—it’s to increase capital.” A public bank can pool local resources and apply its money to local concerns.

“Maybe a certain community has a problem with payday lending,” Baradaran offers. A public bank could provide free accounts and emergency loan services for low-income people without the predatory practices of subprime corporate lenders. “Or maybe another community has an affordable housing issue, or needs farm loans or student loans.”

The cultural climate is ripe for this conversation, says economist Richard Wolff, a retired University of Massachusetts professor who now teaches at the New School. “One of the many consequences of the collapse in 2008 has been a renewed interest in public banking,” he says. “The hostility to the private banking system is quite hot. The spectacle of bank leaders rushing to Washington and begging for a bailout was not lost on the American people.”

Not only did those bailouts trigger outrage among average people who saw no such relief, Wolff points out, but they also revealed the pseudo-public nature of private banks. “Post-bailout, we saw a discomfort with this idea that so much of the banks’ losses were being borne by the taxpayer,” Baradaran says, “while their gains were just going to their own shareholders. That’s wealth redistribution the wrong way.”

Wolff, a longtime advocate for public banking, believes that the job of managing a community’s money is too important to be delegated to for-profit corporations. “Nothing that is so socially embedded should be left in the hands of an institutional organization whose admitted, explicit first priority is maximization of profit for itself,” he says. “The goals and objectives of the private enterprise are not necessarily overlapping one for one with the social benefit.”

A public bank can resolve that tension. As the president of the Bank of North Dakota put it, “We’ve never been a bank that tries to hit home runs. That’s not what we’re all about. We have a specific mission which is more important. Most corporations and banks, their top priority is to maximize shareholder return. And that is a nice byproduct for us because we do have a nice return…But really where we take the most satisfaction is making sure we meet the needs of the state, and finance those types of things that make our state go forward.”

— source by Meagan Day

Government Settlement With Goldman Sachs Is No Real Punishment

the U.S. Department of Justice, including the attorneys general of New York and Illinois, as well as the Federal Home Loan Banks of Chicago and Seattle and the National Credit Union Administration, reached agreement with the investment bank Goldman Sachs. The firm will pay approximately $5 billion to resolve state and federal investigations into its fraudulent mortgage-backed housing securities, which helped cause the 2008 financial crisis.

This is a $5 billion settlement to resolve wrongdoing that cost the national economy $20 trillion. Goldman Sachs has admitted it was a key link in the chain of wrongdoing that led to the 2008 crash and the Great Recession. But eight years after the crash, there are still no criminal prosecutions of either the Big Banks themselves or their executives.

The Department of Justice says this settlement will hold Goldman Sachs accountable. Unfortunately, that’s not so. Without criminal prosecution, there’s not even the illusion of accountability. This settlement, like others involving Goldman Sachs and the rest of the Wall Street perpetrators of the wrongdoing that led to the Great Recession, does virtually nothing to advance the objectives of deterrence, punishment or compensation for victims. The real message is, whether due to size, complexity or privileged access to politicians, Goldman Sachs and Wall Street remain above the law.

— source