Too Big To Prosecute

(Community Matters) The gargantuan size of today’s largest financial institutions represents one of the biggest threats to democracy, equality and real productivity in our life times.  Speaking of an iconic political figure & friend, Sen. Sherrod Brown steps up. And, speaking of unlikely and strange alliances . . .

Playbook: Financial Times p. 1, “Holder says some banks ‘too big to jail'” [not his words], by Shahien Nasiripour in Washington and Kara Scannell in New York: “Washington’s top law enforcement officer told Congress that some banks were ‘too large,’ impeding attempts to bring criminal prosecutions, and feeding suspicion among lawmakers … Responding to criticism that HSBC escaped criminal prosecution for money laundering violations, Eric Holder … said his lawyers were wary of the ‘negative impact’ on the economy from prosecuting a large financial institution. He said he would not comment directly on HSBC, which admitted money laundering offences in December, but there was a deterrent effect from the size and scope of the largest banks. ‘That is a function of the fact that some of these institutions have become too large,’ Mr Holder said, in perhaps the most explicit public admission of concern by a senior Obama administration official regarding big financial groups.

“The size of large banks ‘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 consider.’ Mr Holder’s admission and recommendation comes as some US policy makers and … members of Congress push to restructure the largest financial groups, or impose punishing capital requirements that would incentivise banks to shrink their balance sheets. The budding coalition between Republicans such as Senator David Vitter and Democrats such as Senator Sherrod Brown has driven some policy analysts to warn investors that the largest US banks face a threat from Washington of being broken up. … Holder’s admission is likely to advance the debate on Capitol Hill over whether banks should be restructured.”