The Justice Department’s latest settlement with felonious big banks was announced this week, but the repercussions were limited to a few headlines and some scattered protestations.
That’s not enough. We need to understand that our financial system is not merely corrupt in practice. It is corrupt by design – and the problem is growing.
Let’s connect the dots, using news items from the past few weeks:
The Latest Sweetheart Deal
Four of the world’s biggest banks pleaded guilty to felony charges this week, agreeing to pay roughly $5.6 billion in fines for fixing the price of currencies on the foreign exchange market. Justice Department officials made much of the fact that, unlike previous sweetheart deals with Wall Street, this one required the banks’ parent companies to enter a guilty plea.
That’s an improvement over previous deals. But it’s not as significant as it might have been, since the settlement wasn’t finalized until the banks were able to strike side agreements with regulators to ensure they’d be able to keep doing business as usual.
One of the institutions involved in this deal was Citigroup. […]
“Why are we continuing a failed policy? Why can’t we muster the political will to do what is right?”
The answer to that question seems perfectly obvious to me. “We” do not have control over the government. What we, the voters, want has almost nothing to do with the policies practised by the government. The government acts to further the interests of the ruling class, and the majority is not in the ruling class. It is called the ruling class because it rules. Not us.
Having worked on the financial crimes issue in banks for the past few years, I would have to say that slow progress is being made by the decent people who work for the regulatory agencies. The fines being levied now are genuinely painful for the banks and lead to the removal of high level officers. Banks worry about “reputation loss” and these guilty pleas make it clear that some big banks are criminal organizations. How much would you trust an admitted criminal?