In his appearance before the Senate Judiciary Committee, Attorney General Eric Holder confessed publicly what has long been suspected, that the government has no intention of prosecuting the big banks and putting their top executives in jail even for egregious crimes because they think they are too big to fail.
If this is not a license for these banks to act even more recklessly I don’t what is. Today, NPR’s Morning Edition interviewed Anat Admati, professor of finance at Stanford University and co-author of a new book called The Banker’s New Clothes, where she talks about the danger of this situation and what needs to be done.
Meanwhile Elizabeth Warren on the senate Banking Committee has been grilling officials from the Treasury Department, Federal Reserve, and Office of the Comptroller of the Currency as to why the big banks are not being prosecuted vigorously for major illegalities. She is not buying the argument that vigorously prosecuting the top people at the big banks will result in some kind of meltdown. As she says, there are some basic principles of justice and equity involved.
“If you’re caught with an ounce of cocaine, the chances are good you’re gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life,” Warren said. “But evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your bed at night — every single individual associated with this. And I think that’s fundamentally wrong.”
There has to be sustained congressional and media pressure for things to change.