New York Fed Chief Levels Explosive Charge Against Big Banks

morally bankruptAmerica – we have a crisis. A moral decay that stems from decades of deceit and the acceptance of lies, fraud, and morally bankrupt behavior. We’ve allowed politicians, bankers, attorneys and judges to disregard ethical values and operate under a morally bankrupt code of conduct. It is time to demand that the culture change and it has to start at the top.

Our children have no respect for authority and frankly, how can they when Presidents, politicians and bankers lie – all in the name of money. We’ve set the bar so low that by the time the next generation arrives they won’t be able to recognize the truth. Huffington Post’s  reports the NY Fed Chief’s opinion is that the problems need to be address. Finally maybe, yeah?    

Huffington Post –  – shahien@huffingtonpost.com

The head of the Federal Reserve Bank of New York said Thursday that some of America’s largest financial institutions appear to lack respect for the law, a potentially explosive charge against an industry already roiling from numerous government investigations into alleged wrongdoing.

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William Dudley, one of the nation’s top banking regulators whose organization helps oversee Wall Street banks including JPMorgan Chase and Citigroup, made the comment during a speech focused on the problems posed by banks perceived to be “too big to fail,” and possible solutions to correct them.

But in an abrupt turn, Dudley suggested that regulators may be stymied by “cultural” issues that have negatively affected the nation’s biggest banks.

lies_greed_misery___alt__by_andrewnickson-d54ojrn“Collectively, these enhancements to our current regime may not solve another important problem evident within some large financial institutions — the apparent lack of respect for law, regulation and the public trust,” he said.

“There is evidence of deep-seated cultural and ethical failures at many large financial institutions,” he continued. “Whether this is due to size and complexity, bad incentives, or some other issues is difficult to judge, but it is another critical problem that needs to be addressed.”

Dudley’s comments come as the world’s biggest banks collectively face tens of billions of dollars in potential fines and government-driven settlements arising from alleged lawbreaking in markets ranging from home mortgages to interest rates and currencies.

Authorities in North America, Europe and Asia have been probing more than a dozen large institutions for allegedly attempting to manipulate benchmark interest rates, the most popular of which is known as Libor, that affect hundreds of trillions of dollars in loans and securities. So far, BarclaysUBSRabobank and Royal Bank of Scotland collectively have agreed to pay nearly $4 billion to settle with government authorities. Fannie Mae and Freddie Mac, the giant U.S.-backed mortgage financiers, also have sued many of these banks to recover alleged losses.

In addition, regulators around the world are investigating whether some big banks attempted to rig the foreign exchange market, where currency prices are set and more than $5 trillion is exchanged daily. Goldman Sachs on Thursday became the latest bank to disclose that it was under investigation, joining Barclays, UBS, Deutsche Bank, Citigroup and JPMorgan, among others.

get-out-of-jail-free-card2JPMorgan is also among a group of banks facing U.S. demands for restitution and penalties for allegedly misleading investors when selling them home loans that had been bundled into securities. The bank recently agreed to pay the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, about $4 billion to settle claims it sold the mortgage financiers faulty home loan securities. A group of government agencies led by the Department of Justice has been negotiating with the bank to settle related claims that would call for billions more in cash and aid for distressed homeowners.

The FHFA reportedly is pressuring other financial institutions, such as Bank of America, to pay even higher amounts to settle lawsuits the regulator filed in 2011alleging mass deception by 18 big banks.

New settlements and fines follow nearly $67 billion in fines and settlements agreed to by the nation’s six largest banks since 2010, according to SNL Financial. That figure swells to $103 billion when including legal costs dating to the start of 2008, according to a report earlier this year by Bloomberg News.

Recent pacts with the government include settling allegations that banks duped homeowners into taking out expensive mortgages; broke state and federal rules when attempting to seize homes after borrowers fell behind on their payments, a scandal that became known as “robosigning”; and manipulated markets to bolster their trading positions.

tumblr_mibzyuYOUr1s3dedgo1_500In the aftermath of the financial crisis, regulators and the Justice Department faced criticism from Democratic and Republican lawmakers that they were too soft on banks alleged to have broken the law. Earlier this year, criticism escalated after Attorney General Eric Holder told Congress that some banks were “too large,” thwarting the government’s enforcement efforts.

Holder attempted to walk back those comments, and some five years after the height of the crisis it appears authorities are intent on erasing that view.

Dudley linked accountability and enforcement to “too big to fail,” arguing that ending the perception that some banks will forever be rescued from failure will “encourage the needed cultural shift necessary to restore public trust in the industry.”

“Tough enforcement and high penalties will certainly help focus management’s attention on this issue,” he said. Read more HERE.

What lies behind us and what lies before us are tiny matters compared to what lies within us Ralph Waldo Emerson

 

Thanks Anita for the heads up.

4 thoughts on “New York Fed Chief Levels Explosive Charge Against Big Banks

  1. I love this article! Yes it is time to clean up Corrupted American politics, judges defying the laws, enabling the crimes, blocking justice, shoring up the judicial system with integrity and free the people from this hellish twilight zone! Never in my wildest imagination could I have dreamt this nightmare was possible, with so many players enabling harm on innocent people. Absolutely appalling. Politicians and judges not only standing by with blind eyes but passing and making laws to enable the crime, being absolutely cruel to the American people.

  2. If you want to get a further true view of the govt. take on the financial health of this country and the American people you should also be aware that nothing is being done to enforce the bank’s responsibility to repay the TARP funds due to the treasury dept. AND while no one was paying attention recently the House passed a bill effectively gutting the protections within Dodd- Frank. This is a most egregious about face showing that it is just business as usual and nothing has really been learned at all. Check it out, these are news stories I have come across in the past couple of days ( 11-6-13) They are all traitors and liars.

  3. Sorry dear readers,I am so pissed about what I wrote earlier I forgot to pass along the pertinent info on that House bill I mentioned. Anyway, it is HR 992, the Swaps Improvement Regulatory Act. From the info I have this lovely little bit of trash is basically a verbatim copy & paste piece of legislation that was, get this, written by lobbyists for Citibank which 3 House Republicans and 2 Democrats then co-sponsored. Don’t you just love the fact that these thieving banks are writing legislation that removes protections they don’t like from prior existing legislation designed to control them? Makes you just feel kind of warm & fuzzy all over doesn’t it ? Treasonous, Traitorous Liars (TTL for short) My solution? Impeach and Recall ( I & R) virtually all of them. I’ll shut up now before I give myself a coronary. Wake up people !!!

    • Lex it seems the fox is helping to design the henhouse now. Nothing will change unless heads roll and end up in jail and these so called fines are devastating rather than just being a fractional cost of doing business. Don’t have a coronary as our healthcare is now in question too. When will we reach that pitchfork moment.

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