Saw this at Zerohedge, and it really is mind-blowing After all of the hub-bub and whatnot about TBTF, how these large, inefficient banks still present systemic (and catostrophic) risk to our economy, Eric Holder declared today that some banks are too big to prosecute:
GRASSLEY: On the issue of bank prosecution, I’m concerned that we have a mentality of too-big-to-jail in the financial sector of spreading from fraud cases to terrorist financing and money laundering cases — and I cite HSBC. So I think we’re on a slippery slope.
HOLDER: The concern that you have raised is one that I, frankly, share. And I’m not talking about HSBC now. That (inaudible) be appropriate.
But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.
Again, I’m not talking about HSBC. This is just a — a more general comment. I think it has an inhibiting influence — impact on our ability to bring resolutions that I think would be more appropriate. And I think that is something that we — you all need to — need to consider. So the concern that you raised is actually one that I share.
Indications that if you do prosecute, it will, what Eric, have a negative impact on the national economy? Anyone else read that as an indication that banks are threatening to sabotage the economy in an attempt to evade prosecution? Also, with some of the recent press about the revolving door between the SEC and Wall Street impacting, some argue, the vigor to enforce securities laws, it really appears as though there is someone beyond the curtain that our government would prefer we not see/hear.
But here is what I love. Holder is basically saying this–we cannot prosecute banks because they will destroy the economy, so instead, we will let them continue to operate as they want, which includes occasionally destroying the economy (see 2008). Brilliant.
Related articles
- Too-Big-to-Fail Banks Limit Prosecutor Options, Holder Testifies – Bloomberg (bloomberg.com)
- Holder Says Big Banks Are Too Big to Charge (dealbook.nytimes.com)
- Attorney General Says That The Nation’s Biggest Banks Are Too-Big-To-Jail (thinkprogress.org)
- Senate Could Question HSBC ‘Too Big To Jail’ Case (abcnews.go.com)
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