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View Diary: If the system is rotten it can not recover until the rot is cut out. (13 comments)

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  •  The "Too Big To Fail Get Out of Jail Free Card"... (2+ / 0-)
    Recommended by:
    allenjo, walkshills

    Too Big to Jail: Big Banks Can Finance Terrorists and Walk Away Scot-Free: (Dec. 2012)

    ...megabank HSBC has escaped criminal prosecution for money laundering that probably funded terrorists and narcotics traffickers. Why? Because regulators and prosecutors were petrified that an indictment would undermine the entire financial system. The Times quotes anonymous government sources who confessed fears about bringing formal charges because doing so would be a "death sentence" for the bank. So they let it off the hook...

    No big U.S. bank -- Wells Fargo included -- has ever been indicted for violating the Bank Secrecy Act or any other federal law.

    ...Large banks are protected from indictments by a variant of the too-big-to-fail theory.

    Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

    The theory is like a get-out-of-jail-free card for big banks, Blum says.

    There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.”

    Maybe the govt. needs to let the financial markets "panic".  The alternative is to let the banks continue to be the number one employer of organized criminals, and the drug money launderers and terrorist financiers.  

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