Financial News ArticlesExcerpts of Key Financial News Articles in Media
Henry Ford [is] convinced that if Congress will complete and lease to him the water-power developments [at Muscle Shoals], he can make this whole section of the South more prosperous. Thomas A. Edison indorsed Mr. Ford’s views. He is very earnest in his support of Ford’s [proposal] to finance Muscle Shoals by an issue of currency ... directly by the Government. "If our nation can issue a dollar bond, it can issue a dollar bill," said Mr. Edison. "[When Congress authorizes] an issue of bonds, it must go out to the money brokers. We then must pay interest to the money brokers for the use of our own money. In all our great bond issues, the interest is always greater than the principal. All of the great public works cost more than twice the actual cost on that account. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond ... whereas the currency pays nobody but those who directly contribute. Both are promises to pay: but one promise fattens the usurer, and the other helps the people. It is the money broker, the money profiteer, the private banker, that I oppose. It is a terrible situation when the Government ... must go into debt and submit to ruinous interest charges at the hands of men who control the [issuance of currency]. The people must pay any way: why should they be compelled to pay twice as the bond system compels them? [If] Government will adopt this policy of increasing its national wealth without contributing to the interest collector ... you will see an era of progress and prosperity in this country such as could never have come otherwise.” Mr. Edison reiterated his belief [that if] the currency method is tried in raising money for public improvements, the country will never go back to the borrow method.
Note: If the above link fails, you can read the a copy of the full, fascinating article at this link or this one. The entire article contains lots of amazing revelations of how big bankers keep us in debt. How fascinating that Ford and Edison, both ultra-wealthy businessmen, here are arguing strongly against the privately owned Federal Reserve system through which private bankers print US money and charge interest on it, and for the US government printing its own money. This would avoid US citizens having to pay the big bankers all of the interest on much of the national debt. For lots of evidence to support this way of thinking, click here.
One of Washington's most prominent lobbying firms is on the verge of shuttering after becoming ensnared by special counsel Robert Mueller's investigation. Kimberley Fritts, the chief executive of the Podesta Group, told employees during a Thursday staff meeting that the firm would cease to exist at the end of the year. The developments come after the Podesta Group was tied last week to Mueller's indictments of Paul Manafort and Rick Gates, who pleaded not guilty after being charged with failing to file as foreign agents relating to a decade of work they did for ... a pro-Russia political party in the Ukraine. Mueller's special investigation team has also interviewed multiple people from the Podesta Group, which was recruited by Manafort and Gates to work along with another firm. Talk of potentially closing the Podesta Group marks a dramatic downfall of one of K Street's most iconic and well-connected firms. In its heyday, Podesta Group was the largest non-law firm lobbying organization in Washington. Tony Podesta, the firm's founder and chairman, helped fuel the company with work for foreign governments. He and his brother, John, founded the company almost three decades ago. John Podesta chaired Hillary Clinton's 2016 presidential campaign. He left the firm in 1993. Mueller is looking into whether the Podesta Group properly identified to federal authorities its foreign advocacy for ... a Brussels-based non-profit group that federal prosecutors have called a mouthpiece for pro-Russian Ukrainian politicians.
Note: The Podesta brothers were deeply implicated in the Pizzagate affair. Though many believe Pizzagate was just a "conspiracy theory," our careful research shows powerful evidence that the Podestas were indeed involved in a child sex abuse ring. Could it be that behind the curtains, some are taking action against the Podestas for their involvement in these child abuse rings? For some intriguing, yet difficult to verify evidence along these lines, see this webpage.
Wells Fargo acknowledged Friday that for six years about 570,000 of its customers were charged for auto insurance they didn’t need, potentially driving some to default on their loan and have their cars repossessed. The San Francisco bank said it would start refunding about $80 million, or about $140 each, to customers next month. The revelation quickly sparked a backlash from lawmakers still angry after Wells Fargo admitted last year that thousands of its employees had created millions of fake credit card and bank accounts for customers without their knowledge. “No wonder so many hard-working Americans believe the system is rigged against them in Wall Street’s favor,” Sen. Sherrod Brown, the ranking Democrat on the Banking Committee, said in a statement. Sen. Elizabeth Warren ... renewed her call for the Federal Reserve to force Wells Fargo’s board of directors to resign. “There are surely deep ... problems at a bank when it opens millions of fake customer accounts and charges nearly a million customers for a financial product they don’t need,” Warren said in a statement. “The Wells Fargo Board is ultimately responsible for that failure.” Wells Fargo said the most recent scandal is centered on its auto lending business. Customers’ loan contracts require them to maintain auto insurance and allow the bank to buy it for them if there is no evidence that the customers have a policy, the bank said. But ... customers were being charged for auto insurance premiums even though they already had another policy.
Note: Read more about the massive fraud perpetrated by Wells Fargo. Steve Glazer, chairman of the California Senate Banking and Financial Institutions Committee, recently compared this bank's actions with the behavior of Enron when its culture of corruption initially came to light. For more along these lines, see concise summaries of deeply revealing banking corruption news articles from reliable major media sources.
Following widespread outrage and a blistering Senate Banking Committee hearing last week, Wells Fargo CEO John Stumpf has said he’ll forfeit his outstanding stock awards of about $41 million. Wells Fargo’s former retail-banking head, Carrie Tolstedt, has agreed to forfeit outstanding stock awards of about $19 million. The givebacks are being done in response to charges that the bank opened some 2 million fraudulent deposit and credit card accounts in its customers’ names. Wells Fargo had already agreed to pay $185 million to settle those charges with regulators, but, clearly, that wasn’t enough. The public is worn out by Wall Street’s bad behavior - and it’s also tired of watching low-level employees be scapegoated while top executives get off scot-free. Wells had fired more than 5,000 employees connected to the illegal sales practices, but done nothing to punish senior executives. No one is buying the story that a scandal this large was the work of rogue employees at the bottom of the totem pole. Part of the reason for the alleged unauthorized accounts was employees were pressured to meet unachievable sales goals. Wells has also pledged to end the controversial sales goal program for employees in the retail banking division. The financial meltdown of 2008 ... resulted out of extreme complexity - most politicians and citizens can’t parse a credit default swap. Opening a bank account in someone else’s name without their permission, however, is a wrong that everyone can understand.
Note: For more along these lines, see concise summaries of deeply revealing banking corruption news articles from reliable major media sources.
Like a lot of other Americans, Sen. Elizabeth Warren wants to know why the Department of Justice hasn’t criminally prosecuted any of the major players responsible for the 2008 financial crisis. On Thursday, Warren released two highly provocative letters demanding some explanations. One is to DOJ Inspector General Michael Horowitz, requesting a review of how federal law enforcement managed to whiff on all 11 substantive criminal referrals submitted by the Financial Crisis Inquiry Commission (FCIC), a panel set up to examine the causes of the 2008 meltdown. The other is to FBI Director James Comey, asking him to release all FBI investigations and deliberations related to those referrals. The FCIC’s criminal referrals ... have never been made public. But Warren’s staff reviewed thousands of other documents released in March ... and found descriptions and records of them. They detail potential violations of securities laws by 14 different financial institutions: most of America’s largest banks. And the FCIC named names, specifying nine top-level executives who should be investigated on criminal charges: CEO Daniel Mudd and CFO Stephen Swad of Fannie Mae; CEO Martin Sullivan and CFO Stephen Bensinger of AIG; CEO Stan O’Neal and CFO Jeffrey Edwards of Merrill Lynch; and CEO Chuck Prince, CFO Gary Crittenden, and Board Chairman Robert Rubin of Citigroup. None of the 14 financial firms listed in the referrals were criminally indicted or brought to trial, Warren writes. Only five of the 14 even paid fines.
When Wells Fargo was hit last week with $185 million in fines after thousands of its employees were caught setting up fake accounts customers didn't ask for, regulators heralded the settlement as a breakthrough. But the fines being levied against Wells Fargo pale in comparison to the bank's yearly profit - more than $20 billion in 2015. It is also less than the more than $200 million that the stock in the company held by company's chief executive, John G. Stumpf is worth. The fines also are not that much more than the $125 million one of its top executives, Carrie Tolstedt, will walk away with when she retires this year. "There are two possibilities: Customer abuse was part of business model, in which case lots of high ranking people need to go to prison," said Bart Naylor, a financial policy advocate. "Or the bank is too big to manage, and folks high up don’t even know that laws are being broken a few levels down." The magnitude of the fraud described by regulators should be thoroughly investigated, five Democratic lawmakers said in a letter to the head of the Senate Banking Committee, Richard Shelby (R-Ala.), asking for a hearing on the case. The lawmakers, including Sen. Robert Menendez of New Jersey, said Wells Fargo's CEO, John G. Stumpf, should be called to testify. "It is difficult to believe a large-scale, coordinated [scheme] like this took place without knowledge of some higher ups," Menendez said in an interview.
Note: For more along these lines, see concise summaries of deeply revealing banking corruption news articles from reliable major media sources.
UBS, the world's largest wealth manager, is facing embarrassment over fresh revelations going back to the tax investigation that led to the collapse of Swiss banking secrecy. Two significant events are looming before UBS. The first is the possibility of a public trial in France, featuring UBS whistleblower Bradley Birkenfeld, concerning historic tax evasion allegedly orchestrated by the bank. The other is the publication ... of Birkenfeld's scathing new book, Lucifer's Banker, which covers his time at UBS. The tax evasion controversy, which was first highlighted in 2005, subsequently involved the US Department of Justice, the State Department and Internal Revenue Service. It was prompted by disclosures made by Birkenfeld that UBS had helped wealthy US citizens evade taxes. In 2009, UBS paid $780m (Ł588m, €693m) to US authorities to avoid prosecution. Birkenfeld served 31 months in prison for one count of conspiracy to abet tax evasion by one of his clients. After he was released he was paid a record $104m by the IRS for helping recover unpaid taxes. However, Birkenfeld has since said that he was systematically prevented from giving testimony in open court – but this may be about to change thanks to the French authorities. Birkenfeld claims the UBS coverup stretches to the highest levels of the US establishment. He promises four big names will be exposed in his book, [and] claims there was a glaring conflict of interest involving then Senator Barack Obama, which essentially placed him on the UBS payroll.
Note: Read a New York Times article on how this courageous whistleblower managed to beat the system. As a result of Birkenfeld's disclosures, Obama's suspicious ties with UBS were reported in 2010. For more along these lines, see concise summaries of deeply revealing news articles on corruption in government and in the financial industry.
There aren’t many things upon which Hillary Clinton and Donald Trump agree. But the candidates for president share an affinity for the same ... office building in Wilmington. Famous for helping tens of thousands of companies avoid hundreds of millions of dollars in tax ... 1209 North Orange is home to Apple, American Airlines, Coca-Cola, Walmart and dozens of other companies. Being registered in Delaware lets companies take advantage of strict corporate secrecy rules, business-friendly courts and the “Delaware loophole”, which ... is said to have cost other states more than $9bn in lost taxes over the past decade. Both ... Hillary Clinton and Donald Trump have companies registered at 1209 North Orange, and have refused to explain why. Clinton, who has repeatedly promised that as president she will crack down on “outrageous tax havens and loopholes”, [has] collected more than $16m in public speaking fees and book royalties in 2014 through the doors of 1209. Bill Clinton set up WJC LLC, a vehicle to collect his consultation fees, at the same address in 2008. The Clintons’ companies share the office with several of Trump’s companies. They include Trump International Management Corp and several companies that form part of ... a Trump partnership to develop more than $1bn worth of luxury condos on the west side of Manhattan. Of the 515 companies on Trump’s official Federal Election Commission (FEC) filing, 378 are registered in Delaware.
Note: The above article adds to the evidence that the US, which ranks third in the world in financial secrecy, is a one-party state. For more along these lines, see concise summaries of deeply revealing news articles on corruption in government and in the financial industry.
Bradley Birkenfeld is the most significant financial whistleblower of all time, so you might think he'd be cheering on the disclosures in the new Panama Papers leaks. [He] was a banker working at UBS in Switzerland when he approached the U.S. government with information on massive amounts of tax evasion by Americans with secret accounts in Switzerland. By the end of his whistleblowing career, Birkenfeld had served more than two years in a U.S. federal prison, been awarded $104 million by the IRS for his information and shattered the foundations of more than a century of Swiss banking secrecy. In an exclusive interview Tuesday from Munich, Birkenfeld said he doesn't think the source of the 11 million documents stolen from [Panama City-based law firm Mossack Fonseca] should automatically be considered a whistleblower like himself. Instead, he said, the hacking ... could have been done by a U.S. intelligence agency. "The CIA I'm sure is behind this, in my opinion," Birkenfeld said, [pointing] to the fact that the political uproar created by the disclosures have mainly impacted countries with tense relationships with the United States. "If you've got NSA and CIA spying on foreign governments they can certainly get into a law firm like this," Birkenfeld said. "They selectively bring the information to the public domain that doesn't hurt the U.S.. That's wrong. And there's something seriously sinister here behind this."
A USA Today analysis of more than 1,000 American-based companies registered by Mossack Fonseca, the law firm at the heart of the Panama Papers leak, casts the United States openly into an uncomfortable role: an offshore haven of corporate secrecy for wealthy business operations across the globe. Both Nevada and Wyoming have become secretive havens much like Bermuda and Switzerland have long been. And at least 150 companies set up by Mossack Fonseca in those states have ties to major corruption scandals in Brazil and Argentina. The corporate records of 1,000-plus Nevada business entities linked to the Panamanian law firm reveal layers of secretive ownership, with few having humans' names behind them, and most tracing back to a tiny number of overseas addresses. For about 700 of the American shell companies, the corporate officers are business entities rather than people, meaning no individual is linked to the Nevada firm in state records. Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, [said], “We should be thinking about this as a very American problem, and a problem that arguably is worse here in the states than it is in Panama.” In Wyoming, where Mossack Fonseca has also registered about two dozen companies, corporations are even harder to trace. Mossack Fonseca defended its practices and said incorporating companies in different jurisdictions is “the normal activity of lawyers and agents around the world.”
Note: A 2015 Guardian newspaper article further describes how the US helps the super-rich hide assets. For more along these lines, see concise summaries of deeply revealing financial industry corruption news articles from reliable major media sources.
Massachusetts Senator Elizabeth Warren issued a stinging broadside against federal prosecutors on Friday, charging U.S. courts with throwing the book at mixed-up teenagers, while letting wealthy corporate executives who commit much larger and sometimes deadly crimes off with essentially no chance of punishment. In a new report, Sen. Warren’s office makes the case that CEOs and other top executives simply don’t face the same legal consequences as ordinary Americans, releasing a list of what it claims are 20 examples of corporate criminal and civil cases that prosecutors failed to pursue to the full extent of the law last year. Among the cases: scandals ranging from General Motors’ years’ long cover up of ignition switch problems to currency manipulation by large banks (including Citigroup and J.P. Morgan), to a mine explosion that killed 29 people - the only instance of misconduct which led to a conviction of a corporate executive. Such selective application of the law undermines the government’s moral authority: “If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, then the promise of equal justice under the law has turned into a lie,” Warren charges in the report. It’s not just a problem in the U.S. This week, U.K. prosecutors, after winning an initial conviction in their quest to prosecute bankers accused of fixing LIBOR - a key benchmark central to financial markets - failed to secure any further wins.
Note: Senator Elizabeth Warren was called "the champion of Main Street versus Wall Street" by the Boston Globe in 2014. For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the corporate world.
The Vatican announced Monday that two members of a commission set up by Pope Francis to study financial operations at the Holy See had been arrested on suspicion of leaking confidential documents to journalists. The arrests came days before the publication of two books - “Avarizia,” or “Avarice,” by Emiliano Fittipaldi, and “Merchants in the Temple,” by Gianluigi Nuzzi. Both books claim to offer glimpses of the turmoil surrounding Francis as he pursues his reforms of Vatican finances, the operations of the Curia and the Vatican bank. Those institutions had long been plagued by scandal and corruption that contributed to the resignation in 2013 of Francis’ predecessor, Pope Benedict XVI, the first pope to step down in nearly 600 years. Divulging confidential documents has been considered a crime in the Vatican since July 2013, after the leak of a cache of Vatican documents ... which Mr. Nuzzi published. Besides reporting on the church’s vast financial holdings, Mr. Fittipaldi said he had also discovered that money given to the church for the poor was used for other purposes. Mr. Nuzzi’s book ... suggests that the Vatican’s finances were in such chaos that Benedict had no choice but to resign. “I am certainly surprised that the Vatican responds to the imminent publication of a book with handcuffs,” Mr. Nuzzi said ... particularly “when handcuffs aren’t used to stop the thieves in the Vatican.”
Note: In 2012, leaked documents revealed that the Vatican Bank was used for money laundering. For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the financial industry.
According to the New York Department of Financial Services, a banking regulator, Goldman hired Rohit Bansal from the Federal Reserve Bank of New York in May 2014, "in large part for the regulatory experience and knowledge he had gained while working at the New York Fed." Goldman hired Bansal despite the fact that he had been forced to resign from the Fed for breaking the rules there. Once at Goldman, Bansal was instructed to work on a bank that he had supervised while at the Fed, despite explicit prohibitions against him doing so, NYDFS said. Bansal later used confidential information, some of which he obtained from his prior employment at the NY Fed and some of which he obtained from from a former NY Fed colleague, in his work on the bank. To resolve the matter, Goldman has agreed to pay $50 million and accept a three-year "voluntary abstention" from accepting new consulting engagements of NYDFS regulated entities. Goldman also agreed to admit that a former employee engaged in the criminal theft of confidential information and that Goldman management "failed to effectively supervise its employee to prevent this theft from occurring," NYDFS said. In September 2014, for example, Bansal attended the birthday dinner of a former Fed colleague at Peter Luger's. Immediately after the dinner, Bansal emailed his boss at Goldman "divulging confidential information concerning the regulated entity, specifically, the relevant component of the upcoming examination rating," NYDFS said.
A former Goldman Sachs banker suspected of taking confidential documents from a source inside the government has agreed to plead guilty, a rare criminal action on Wall Street, where Goldman itself is facing an array of regulatory penalties over the leak. The banker and his source, who at the time of the leak was an employee at the Federal Reserve Bank of New York, one of Goldman’s regulators, will accept a plea deal from federal prosecutors that could send them to prison for up to a year. Under a tentative deal ... Goldman would pay a fine of $50 million. For Goldman and the New York Fed, the case is likely to give new life to an embarrassing episode that illustrated the blurred lines between their institutions. Perhaps more than any other bank, Goldman swaps employees with the government, earning it the nickname “Government Sachs.” While the so-called revolving door is common on Wall Street, the investigation [affirms] the public’s concerns that regulators and bankers, when intermingled, occasionally form unholy alliances. The Goldman banker, Rohit Bansal, previously spent seven years as a regulator at the New York Fed.
Twenty of the world's biggest banks have paid more than $235 billion in fines and compensation in the last seven years for a litany of misdeeds. The scale of the payouts, equivalent to the annual economy of Greece or Portugal, has hampered banks' efforts to rebuild capital, reduced dividends for investors and cut the amount firms are able to lend. The misconduct bill is expected to rise by tens of billions more dollars, and many politicians, regulators and industry observers said more needs to be done. Mark Taylor, dean of the business school at the University of Warwick in central England [says] bonuses are too high, there is little threat of jail for wrongdoers and bosses are not held responsible. "The problem is the incentives for cheating markets is massive. If you can shift a rate fractionally you can make millions and millions of dollars for your bank and then for bonuses. "Once senior executives feel they are personally at risk if the culture doesn't change, and individual traders feel they are at risk of being put in prison, then you'll get a culture change," he said. Despite the scale of fines and compensation paid by banks, relatively few individuals have been punished. Data compiled by Reuters ... showed U.S. banks have paid $140 billion in litigation and compensation for mortgage related issues since 2008. Bank of America has paid out twice as much as any other bank in settlements and compensation, with a bill of almost $80 billion.
Note: Big bank settlements often amount to "cash for secrecy" deals that are ultimately profitable for banks. For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the financial industry.
Illegal and unethical behaviour on Wall Street and in the City of London isn't just the work of a few bad apples - it's commonplace, according to new research. More than one in five financial services employees in America and the UK have seen their co-workers breaking the law or engaging in misconduct, a survey of more than 1,200 workers has found. Many feel under pressure to break the rules, believing it is a necessary part of getting ahead. Those at the top of the food chain are even more likely to have seen misconduct, with over a third of those earning more than $500,000 a year say they "have witnessed or have first hand knowledge of wrongdoing in the workplace". The University of Notre Dame and law firm Labaton Sucharow, which published the report, said it showed that bankers had failed to improve behaviour, despite billions of dollars in fines, and new regulations threatening jail. "Despite the headline-making consequences of corporate misconduct, our survey reveals that attitudes toward corruption within the industry have not changed for the better," the report's authors said. The researchers ... interviewed 1,223 banking and financial services workers. The research comes the day before five banks are expecting fines worth more than $6bn related to foreign exchange manipulation. Those questioned in the survey were also asked about whistleblowing practices, and 16pc said that corporate policies barred them from reporting illegal activity to authorities.
Note: For more along these lines, see concise summaries of deeply revealing banking corruption news articles from reliable major media sources.
U.S. authorities are investigating major banks over potential manipulation of the precious metals market, the latest development in a series of probes related to major financial benchmarks. HSBC is among at least 10 major banks being investigated by U.S. authorities for possible rigging of the price-setting process for gold, silver, platinum and palladium, The Wall Street Journal reported late Monday. The report said other banks being scrutinized include: Goldman Sachs; JPMorgan Chase; Britain-based Barclays; Swiss banking giants UBS and Credit Suisse; Bank of Nova Scotia; Germany-based Deutsche Bank; France-based Société Générale; and South Africa-based Standard Bank Group. U.S. authorities declined to comment. Goldman Sachs, HSBC, Deutsche Bank and Barclays, HSBC, UBS and Bank of Nova Scotia have been named as defendants in various putative class-action lawsuits in U.S. federal courts over suspected manipulation of precious metals pricing. The complaints contend that bank traders conspired to manipulate the price of metal derivatives in a bid to reap profits on proprietary trades. The new U.S. investigations follow separate bank probes launched earlier over suspected manipulation of the $5.3-billion-a-day foreign exchange currency trading market, along with rigging of the London Interbank Offered Rate (Libor), which is used to set rates on billions of dollars in loans, credit cards and mortgages.
Note: When it comes to international banking, it appears that almost everything is rigged. For more along these lines, see concise summaries of deeply revealing news articles about the systemically corrupt financial industry.
One man's story in particular highlights just about everything that can go wrong when you give evidence against your bosses in America: former Countrywide/Bank of America whistleblower Michael Winston. Two years ago this month, Winston was being celebrated in the news as a hero. He'd blown the whistle on Countrywide Financial, the bent mortgage lender that ... nearly blew up the global economy. Today, Winston [has] spent over a million dollars fighting Countrywide (and the firm that acquired it, Bank of America) in court. At first, that fight proved a good gamble, as a jury granted him a multi-million-dollar award for retaliation and wrongful termination. But after Winston won that case, an appellate judge not only wiped out that jury verdict, but allowed Bank of America to counterattack him. The bank eventually beat him for nearly $98,000 in court costs. That single transaction means a good guy in the crisis drama, Winston, had by the end of 2014 paid a larger individual penalty than virtually every wrongdoer connected with the financial collapse of 2008. When Winston protested his preposterous punishment on the grounds that a trillion-dollar company recouping legal fees from an unemployed whistleblower was unreasonable and unnecessary, a California Superior Court judge denied his argument — get this — on the grounds that Winston failed to prove a disparity in resources between himself and Bank of America! Four years later, we're still waiting for the first criminal conviction against any individual for crisis-era corruption. There's been no significant reform. What we've seen instead is a series of cash deals with the most corrupt companies.
Note: Countrywide bought political influence to more effectively defraud institutional investors and taxpayers. Thanks to Winston, they were caught and proven guilty. But Bank of America purchased Countrywide, and has been paying off officials in secret deals to continue skirting the law without admitting wrongdoing. And Michael Winston now has to pay Bank of America for their trouble.
The middle class can't be saved unless Wall Street is tamed. Yet most presidential aspirants don't want to talk about taming the Street because Wall Street is one of their largest sources of campaign money. Six years ago ... the financial collapse crippled the middle class and poor, consuming the savings of millions of average Americans and causing 23 million to lose their jobs, 9.3 million to lose their health insurance and some 1 million to lose their homes. A repeat performance is not unlikely. Wall Street's biggest banks are much larger now than they were then. Five of them hold about 45 percent of America's banking assets. In 2000, they held 25 percent. Meanwhile, the Street's lobbyists have gotten Congress to repeal a provision of Dodd-Frank curbing excessive speculation by the big banks. The language was drafted by Citigroup and personally pushed by Jamie Dimon, CEO of JPMorgan Chase. It's nice that presidential aspirants are talking about rebuilding America's middle class. But to be credible, the candidates have to [propose] to limit the size of the biggest Wall Street banks, to resurrect the Glass-Steagall Act (which used to separate investment banking from commercial banking), to define insider trading the way most other countries do (using information any reasonable person would know is unavailable to most investors), and to close the revolving door between the Street and the U.S. Treasury. It also means not depending on the Street to finance their campaigns.
The former chief executive of Landsbanki of Iceland was sentenced to prison on Wednesday, the third of the top executives of the country’s three largest banks that the government has successfully prosecuted and jailed for misconduct during the financial crisis. Iceland was one of the countries hardest hit by the financial crisis and was forced to nationalize its three largest lenders in 2008. Mr. Arnason is the third former chief executive of an Icelandic bank to be ordered jailed for misdeeds in the run-up to the nationalization of Landsbanki and two other of the island nation’s biggest lenders. Kaputhing, at one time Iceland’s largest lender, saw its chief executive, Hreidar Mar Sigurdsson, and its chairman, Sigurdur Einarsson, convicted of market manipulation last year. Mr. Sigurdsson was sentenced to five and a half years in prison, while Mr. Einarsson was sentenced to five years in prison. Larus Welding, the former chief executive of Glitnir, the first of the banks to be nationalized, was convicted of fraud in 2012. The Icelandic lenders expanded beyond their borders during the boom years, only to collapse under a mountain of debt as financial conditions worsened in 2008. After the banks were nationalized, Iceland’s government restructured them, purging their management and refusing to bail out foreign bondholders who held tens of billions of dollars of the banks’ debt. A special prosecutor, Olafur Hauksson, was appointed to investigate the actions of bank executives in the run-up to the financial crisis.
Note: So the one nation that jailed its big bankers and let banks go bust is doing very well. Why are so exceedingly few bankers in other countries being jailed for crimes involving trillions of dollars and bankrupting millions of citizens? For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the financial industry.
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