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article imageOp-Ed: Banks are not only too big to fail but too big to jail

By Ken Hanly     Mar 6, 2013 in Business
Washington - Big banks are above the law. Not only are they too big too fail but according to US Attorney General Eric Holder they are also too big to prosecute.
Eric Holder was speaking before the Senate Judiciary Committee on March 6. Since the financial crisis banks have only grown larger with more consolidation in the financial sector. Holder confessed to the committee:"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."
Holder's underlings had already demonstrated the truth of what Holder said when last year they decided not to prosecute HSBC for flagrant violation of money-laundering laws over a number of years. The policy was also made evident in the documentary "The Untouchables". The situation is not unique to the US. The UK situation is the same. Andrew Bailey, chief executive designate of the Prudential Regulation Authority, admitted large banks had become too big to prosecute, raising 'very difficult questions' for regulators.
Defenders of the system say that the Justice Department policy is correct in that a prosecution could be very upsetting to the financial system and even trigger a recession. This seems to be little more than an apology for letting the big banks break the law with relative impunity. They often do get fined but the fines can be thought of as a cost of doing business.
What sort of justice system is it that tells large financial corporations that they will not be prosecuted for breaking the law. Obviously it is a system where large financial institutions must have a great deal of clout!
Senator Sherrod Brown a Democrat of Ohio, and David Vitter, a Republican of Lousiana are working together to frame bipartisan legislation to address the problem. The solution may be to break up the big banks but that may be difficult to do. As long as huge financial corporations have huge influence in Congress, any regulation of them will be relatively benign for their interest.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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