Big
banks take advantage of money laundering epidemic in US
The
attorney general of the United States says the country’s largest
banks may be too big to jail, but the former chief economist for the
International Monetary Fund isn’t exactly convinced.
1
April, 2013
Simon
Johnson, the former top IMF economist and a current professor at the
MIT Sloan School of Management, published a blistering editorial in
Bloomberg
News this week that makes an argument for imprisoning
the banksters responsible for the nation’s last financial crisis —
and possibly the next one — much to the chagrin of Attorney General
Eric Holder.
Large
international banks, writes Simon, are guilty of money laundering to
the degree of epidemic proportions. If recent admissions from the
biggest name in the American economy are any indication, though, they
have nothing to fear.
“Governor
Jerome Powell, on behalf of the Board of Governors of the Federal
Reserve System, recently testified to Congress on the issue, and he
sounded serious. But international criminals and terrorists needn’t
worry. This is window dressing: Complicit bankers have nothing to
fear from the U.S. justice system,”
writes Simon.
Speaking
to Congress last month, US Attorney General Eric Holder admitted, "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.”
Johnson, on the other hand, implores the US Justice Department in his
latest op-ed to follow in the footsteps of other countries and to
once and for all condemn the corrupt practices that banks have been
given a mere slap on the wrist for — and now harsh prosecutions.
In
the editorial published Sunday evening, Johnson attacks both the
Department of Justice and the Federal Reserve for failing to take
action against the big banks.
“There
may be fines, but the largest financial companies are unlikely to
face criminal actions or meaningful sanctions,”
he writes. “The Department
of Justice has decided that these banks are too big to prosecute to
the full extent of the law, though why this also gets employees and
executives off the hook remains a mystery. And the Federal Reserve
refuses to rescind bank licenses, undermining the credibility,
legitimacy and stability of the financial system.”
Last
December, the US government demanded Standard Chartered Bank — the
fifth largest bank in the UK—pay up $327 million in fines after
being caught guilty of laundering a quarter of a trillion dollars.
Bartlett Naylor, the financial policy reform advocate for Public
Citizen's Congress Watch, writes for Huffington
Post
that the sum is “paltry”
when put into perspective of what banks should be paying, but even
the attorney general — the nation’s top prosecutor — cannot
figure a way to pursue much more.
In
that regard, writes Simon this week, there’s very little to worry
about for banking that may be considering colossal laundering
schemes. “[I]nternational
criminals and terrorists needn’t worry,”
he writes.
Is
the US actually becoming a haven for international banks to commit
massive money laundering operations? The nations’ top economists
seem to admit as much, but why, then, isn’t anything being done?
“If you or I tried to
launder money, even on a small scale, we would probably go to jail.
But when the employees of a very big bank do so — on a grand scale
and over many years — there are no meaningful consequences,”
writes Johnson.
According
to the attorney general, it might just not be possible.
"I think that is a function of the fact that some of these
institutions have become too large,”
Holder said on Capitol Hill last month.
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