A galling read by the US House of Representatives.
By Wolf Richter of WOLF STREET
The US House of Representatives today released the results of its three-year investigation – hampered along the way by the Department of Justice and the Department of the Treasury – into why HSBC and its executives weren’t prosecuted.
Empirical evidence has told us for years that in the US a bank and its executives cannot be prosecuted if the bank is big enough. We’ve come to call this type of bank “Too Big to Jail.”
Empirical evidence has also told us that a bank can do essentially whatever it wants to, given that, if caught, it may have to pay a fine that then becomes just part of the cost of doing business. Wall Street doesn’t care about fines. They’re “extraordinary items” that banks and analysts systematically exclude from their “ex-items” per-share earnings.
Fines matter under GAAP reporting. But they don’t matter in the rosy picture that Wall Street paints of the banks. And so they don’t matter.
But now comes the House Financial Services Committee and offers evidence beyond our “empirical evidence”: a 288-page report, “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”…