4 ms·

> Ah yes, I love when my government hassles innocent people to make a point to everyone else. I also love it when some people are just "Too Big To Jail (TM)"

by 21 9y ago

> Ah yes, I love when my government hassles innocent people to make a point to everyone else. I also love it when some people are just "Too Big To Jail (TM)" > Those investigations uncovered substantial evidence "that senior bank officials were complicit in the illegal activity." > On Tuesday, not only did the US Justice Department announce that HSBC would not be criminally prosecuted, but outright claimed that the reason is that they are too important, too instrumental to subject them to such disruptions. In other words, shielding them from the system of criminal sanction to which the rest of us are subject is not for their good, but for our common good. > The New York Times Editors this morning announced: "It is a dark day for the rule of law." There is, said the NYT editors, "no doubt that the wrongdoing at HSBC was serious and pervasive." But the bank is simply too big, too powerful, too important to prosecute. https://www.theguardian.com/commentisfree/2012/dec/12/hsbc-prosecution-fine-money-laundering https://www.theguardian.com/commentisfree/2012/dec/12/hsbc-p...

Iv 9y ago
I am still angry that banks too big to fail were not nationalized at this time.
- croon 9y ago
  Bingo. You've as a country determined that an institution is too important to your population and your country's stability to have it go bankrupt. But instead of growing your economy through it, you through actions deem it okay to siphon money to the private owners instead of the people paying for it through taxes.
- PhantomGremlin 9y ago
  They sort-of were nationalized. But it was done somewhat subtly. The existing common equity (and IIRC preferred stock) in a number of entities was massively diluted by issuing new preferred stock and warrants to the US government. Here are two examples, they were among the worst offenders. Look at the share price for Citigroup and AIG: https://finance.yahoo.com/quote/C?p=C https://finance.yahoo.com/quote/C?p=C https://finance.yahoo.com/quote/aig/?p=aig https://finance.yahoo.com/quote/aig/?p=aig If you owned pre-crisis C common stock, you're still down about 84%. If you owned pre-crisis AIG common, you're still down about 95%. (that's approximate, done by eyeballing the charts). Edit: Yahoo Finance charts have been getting worse and worse, you need to click "Max" to see the proper timeline. I don't follow UK equities closely, but I think the same thing happened to a number of UK banks at the time. E.g. RBS. Unfortunately the whole thing was quite uneven. E.g. Goldman Sachs took advantage of the morons at AIG who sold them very cheap "insurance" such as credit default swaps. But Goldman was made whole. What should have happened is that Goldman should have been made to share the pain. Edit: I'm of course talking about the '08 financial crisis in general. I don't agree that the Libor scandal was significant enough to nationalize the banks as punishment. I'd much rather see a few bad actors taken out back and shot. That would be much more salutary in terms of deferring future bad behavior.
  - joejerryronnie 9y ago
    Too many ex-Goldman execs are in positions of political power for that company to ever be punished in any meaningful way.
  - tinokid 9y ago
    No, no shooting. They should have just let the market work and the banks go under. It would have been a financial loss but a moral victory. An important lesson about carefully choosing who you trust.
- pjc50 9y ago
  Not necessarily an improvement. RBS was nationalised, in 2008 when it was failing. It's still majority state-owned. But since then as part of the bank attempting to return to profitability another scandal emerged - squeezing small business customers into bankruptcy in order to take their assets. http://www.telegraph.co.uk/business/2017/09/07/nicky-morgan-demands-publication-report-rbss-controversial-restructuring/ http://www.telegraph.co.uk/business/2017/09/07/nicky-morgan-...
  - arethuza 9y ago
    I can recommend the book Shredded: Inside RBS: The Bank that Broke Britain - by its account RBS actually seems to be worse behaved after their bailout than before. Before the bailout they were just incompetent, since then they have been downright malevolent.
    - TheOtherHobbes 9y ago
      The results of nationalisation depend on the people running the nation. If they have questionable ethics, so will the industries they run. The real problem isn't banking, it's neoliberalism's sanctification of individualistic greed. When collective morality decides that almost any behaviour is acceptable as long as a few people make a big profit, the political and moral consequences are unlikely to be positive.
jandrese 9y ago
I think the problem is if you set even the low bar and convict that guy, there will be legitimate questions as to why you aren't going after all of the CEOs and many of the people under them. Basically, everybody was guilty and you can't prosecute them all. Someone has to be left to run the banks.

by 21 9y ago

Iv 9y ago

I am still angry that banks too big to fail were not nationalized at this time.

croon 9y ago
Bingo. You've as a country determined that an institution is too important to your population and your country's stability to have it go bankrupt. But instead of growing your economy through it, you through actions deem it okay to siphon money to the private owners instead of the people paying for it through taxes.
PhantomGremlin 9y ago
They sort-of were nationalized. But it was done somewhat subtly. The existing common equity (and IIRC preferred stock) in a number of entities was massively diluted by issuing new preferred stock and warrants to the US government. Here are two examples, they were among the worst offenders. Look at the share price for Citigroup and AIG: https://finance.yahoo.com/quote/C?p=C https://finance.yahoo.com/quote/C?p=C https://finance.yahoo.com/quote/aig/?p=aig https://finance.yahoo.com/quote/aig/?p=aig If you owned pre-crisis C common stock, you're still down about 84%. If you owned pre-crisis AIG common, you're still down about 95%. (that's approximate, done by eyeballing the charts). Edit: Yahoo Finance charts have been getting worse and worse, you need to click "Max" to see the proper timeline. I don't follow UK equities closely, but I think the same thing happened to a number of UK banks at the time. E.g. RBS. Unfortunately the whole thing was quite uneven. E.g. Goldman Sachs took advantage of the morons at AIG who sold them very cheap "insurance" such as credit default swaps. But Goldman was made whole. What should have happened is that Goldman should have been made to share the pain. Edit: I'm of course talking about the '08 financial crisis in general. I don't agree that the Libor scandal was significant enough to nationalize the banks as punishment. I'd much rather see a few bad actors taken out back and shot. That would be much more salutary in terms of deferring future bad behavior.
- joejerryronnie 9y ago
  Too many ex-Goldman execs are in positions of political power for that company to ever be punished in any meaningful way.
- tinokid 9y ago
  No, no shooting. They should have just let the market work and the banks go under. It would have been a financial loss but a moral victory. An important lesson about carefully choosing who you trust.
pjc50 9y ago
Not necessarily an improvement. RBS was nationalised, in 2008 when it was failing. It's still majority state-owned. But since then as part of the bank attempting to return to profitability another scandal emerged - squeezing small business customers into bankruptcy in order to take their assets. http://www.telegraph.co.uk/business/2017/09/07/nicky-morgan-demands-publication-report-rbss-controversial-restructuring/ http://www.telegraph.co.uk/business/2017/09/07/nicky-morgan-...
- arethuza 9y ago
  I can recommend the book Shredded: Inside RBS: The Bank that Broke Britain - by its account RBS actually seems to be worse behaved after their bailout than before. Before the bailout they were just incompetent, since then they have been downright malevolent.
  - TheOtherHobbes 9y ago
    The results of nationalisation depend on the people running the nation. If they have questionable ethics, so will the industries they run. The real problem isn't banking, it's neoliberalism's sanctification of individualistic greed. When collective morality decides that almost any behaviour is acceptable as long as a few people make a big profit, the political and moral consequences are unlikely to be positive.

jandrese 9y ago

I think the problem is if you set even the low bar and convict that guy, there will be legitimate questions as to why you aren't going after all of the CEOs and many of the people under them. Basically, everybody was guilty and you can't prosecute them all. Someone has to be left to run the banks.