You Won’t Believe What They’ve Done …
Here are just some of the improprieties by big banks:
Launching a coup against the President of the United States
Handling money for rogue military operations
Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)
Cheating homeowners by gaming laws meant to protect people from unfair foreclosure
Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing
Manipulating the hundred trillion dollar derivatives market
Engaging in insider trading of the most important financial information
Participating in various Ponzi schemes. See this
Charging veterans unlawful mortgage fees
Helping the richest to illegally hide assets
The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.
Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.
Even the bank with the reputation as being the “best managed bank” in the U.S., JP Morgan, has engaged in massive fraud. For example, the Senate’s Permanent Subcommittee on Investigations released a report today quoting an examiner at the Office of Comptroller of the Currency – JPMorgan’s regulator – saying he felt the bank had “lied to” and “deceived” the agency over the question of whether the bank had mismarked its books to hide the extent of losses. And Joshua Rosner – noted bond analyst, and Managing Director at independent research consultancy Graham Fisher & Co – notes that JP Morgan had many similar anti money laundering laws violations as HSBC, failed to segregate accounts a la MF Global, and paid almost 12% of its 2009-12 net income on regulatory and legal settlements.
But at least the big banks do good things for society, like loaning money to Main Street, right?
The big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)
A huge portion of the banks’ profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies
We can almost understand why Thomas Jefferson warned:
And I sincerely believe, with you, that banking establishments are more dangerous than standing armies ….
John Adams said:
Banks have done more injury to religion, morality, tranquility, prosperity, and even wealth of the nation than they have done or ever will do good.
And Lord Acton argued:
The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.
No wonder a stunning list of prominent economists, financial experts and bankers say we need to break up the big banks.