Published CommPro.biz 2014.06.03

Credit Suisse - 

You Can’t Put A Bank In Jail

Credit Suisse, a Swiss monster bank apparently has copped a plea with the United States Justice Department. This story has been seeping out since United States Attorney General Eric Holder declared several weeks ago that no bank is “too big to jail.” While that sounds tough, the fact is that banks do not go to jail, people go to jail. And in this case nobody is going to jail. Justice is trumpeting the $2.6 billion dollar fine they got Credit Suisse to cough up. That sounds like a lot but it’s next to nothing given their massive criminal activity.

Credit Suisse sent hustlers out to recruit ultra-rich Americans. They arranged trips to Switzerland to open a secret Swiss bank account. Now, we’re not talking about a handful of rich folks; there are more than 20,000 Americans who are said to have as much as $12 billion stashed overseas with Credit Suisse. In that light the bank got off really easy. Meanwhile it’s business as usual at the bank; in fact their stock went up one percent the day this deal came out.

How are the Credit Suisse hustlers who recruited the ultra-rich and guided them into this tax racket anything but crooks? If they recruited rich Americans to show them how to hide their bucks from the IRS in secret Swiss bank accounts, that sounds to us like they conspired to defraud the United States government. If there are billions overseas still hidden away in Credit Suisse accounts, how have the American people been served?

Why aren’t the Americans who lapped up this deal being named? Why aren’t they being charged? Why aren’t the bankers who recruited them being charged? Why aren’t their bosses who sent them out to recruit tax cheats being charged? And their bosses’ bosses and the CEO of the bank, Brady Dougan, why aren’t they all being charged? Are we to believe Credit Suisse had a crew of hustlers vacuuming American bucks – as much as $12 billion – into secret bank accounts and Dougan didn’t know? It isn’t like he is a stranger in our land; Brady Dougan is a US citizen. One wonders, does Dougan have a secret Swiss account?

We have bankers laundering dirty money of every kind, telling the drug cartels, “If it’s cash we’ve got your stash.” We have bankers scheming to fix international interest rates and help rogue nations avoid sanctions. And now adding recruiting tax cheats to their litany of bad behaviors. AG Eric Holder maintains that sending these criminals to jail might jeopardize the world economy. Really? Instead we give them fines that they see as no more serious than a parking ticket. Yet, just let any of these banks have a couple of bad quarters and watch their top guy get the boot. Executive turnover is an everyday thing; to imagine that bankers are too important to jail is madness.

Published CommPro.biz 2014.04.08

Too Big To Manage, Not Too Big To Fail

In an effort to forestall another “Too Big Too Fail” recession, our Federal Reserve established the so-called Stress-Tests. The Fed looks at a number of aspects of a bank’s operations and determines its potential to go belly-up, requiring another taxpayer bailout, even triggering another recession. Frankly, none of the monster banks are stable. They engage in what would be illegal gambling except for the exemption the Congress gave them to label risky behavior as “Investments.” The eight largest banks have all been told to beef up; to add close to $70 billion in fresh capital.

The latest stress-test dealt a blow to Citicorp. The sprawling giant failed for the second time in two years. The last stress-test failure in 2012 led to a change in leadership, unseating the CEO. This is the second blow Citi has suffered in recent months; in February its Mexican operation was hit with a $400 million fraud. Basically the Fed found that Citi is out of control, not just too big to fail, but too big to manage. It’s clearly time to break up Citi’s operations; it’s time for Citi to become a bank again.

It’s obviously time for all the monster banks to break up their uncontrollable global operations. They’re all clearly too big to manage. When banks count their Vice Presidents by the tens of thousands, that alone should indicate that the same conditions that led to the breakup of the monster banks of the day in the 1930s are in place again today.  It’s also apparent that these behemoths serve no real purpose in our society.

Quite the opposite, the monster banks disrupt the banking sector. Aside from the role they play in manipulating interest rates and other hanky-panky, they make it more than difficult for our community banks. Take credit cards for instance. With the revenue from their legalized gambling operations, they can make offers that a legitimate community bank cannot match. They suck off the checking and savings accounts as well.

But unlike the community banks they don’t use the funds harvested from these sources to provide small business loans. They pour this cash into risky gambling ventures with no social benefit. That leaves the small businesses that create most of the new jobs in our economy starved for operating cash and our economy the worse for it. In addition to Citi, the Fed failed three international banks with operations in the United States including British giant HSBC which our Justice Department considered too big to jail when they were exposed as facilitating international criminal enterprises.

There are a host of reasons why the monster banks should become a thing of the past. Problem is they pour cash into the pockets of our legislators and thwart any effort to restrict or control them. Arrogant CEOs like Chase über kommandant Jamie Dimon strut and lecture our Congressional leaders, flashing cuff links with the Presidential Seal. Those sent to take care of the people’s business are instead increasingly beholden to those with the cash to dictate to them, among others the monster banks.

 
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