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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBankers Could Go To Jail by Dean Baker
https://www.commondreams.org/view/2014/06/25-0Morning Edition had a strange piece discussing how regulators can punish banks for breaking the law. The piece focused on the various fines and regulatory measures that can be imposed as penalties when banks are found to have broken the law. Remarkably it never considered the underlying logic of the punishment and the likely deterrent effect on criminal activity.
While banks are legal institutions, ultimately it is individuals that break the law. The question that any regulator should be asking is the extent to which the penalties being imposed will discourage future law breaking. As a practical matter, the immediate victims of the measures mentioned in the piece are banks' current shareholders. Since there is often a substantial period of time between when a crime is committed and when regulators discover it and succeed in imposing a penalty, the shareholders facing the sanction will be a different group from the shareholders who benefited from the original crime. This makes little sense either from the standpoint of justice or from the standpoint of deterring criminal activity by bankers.
The imposition of large fines may cause current shareholders to demand the executives who broke the law be fired, but in many cases they will have already moved on to other jobs or retired. In the case of the fraudulent loans that were passed on in mortgage backed securities (MBS) in the housing bubble years, most of the top executives had already left their banks by the time actions were brought by the Justice Department.
In this case, they made enormous amounts of money by breaking the law. The financial crisis may have caused them to retire or leave their banks somewhat sooner than they would have preferred, but almost all of them come out as net gainers from their actions.
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Bankers Could Go To Jail by Dean Baker (Original Post)
xchrom
Jun 2014
OP
pipoman
(16,038 posts)1. I think the time has come to quit chasing Nazi war
criminals and concentrate on more modern criminals running loose. ..
PowerToThePeople
(9,610 posts)2. Pigs could fly
No freakin' way it will happen with the way our corrupt governmental officials are financed by the crooks.
SamKnause
(13,114 posts)3. That is as likely to happen
as me growing a penis on my 61st birthday tomorrow.
When criminals control the government, Wall Street, and banks who exactly is left to jail these criminal mf's ????
Buns_of_Fire
(17,210 posts)4. Nice thought. Ain't gonna happen, though. nt
socialist_n_TN
(11,481 posts)5. RE: the headline, I'll believe it when I see it......
And I see that the other responders have the same attitude about it.