Almost six years after the financial crisis, JPMorgan, Citigroup, and Bank of America face fines of around $12 billion each for their role in mortgage malfeasance. In the context of the damage done and the bailout money poured into banks; the fines are miniscule and won’t even cover reparations in one or two blighted areas.
This is after a series of post-crisis banking scandals revealing the fragility of the banking system and after JPMorgan Chase was the only bank to receive an SEC fine combined with an admission of wrongdoing for its well-publicized London Whale incident. Officers of JPMorgan Chase have not been held accountable. Moreover, banks harbor massive balance sheet risk against which they hold insufficient capital.
Timothy Geithner’s Ministry of Truth Tour
Timothy Geithner, former president of the Federal Reserve Bank of New York, a bank regulator during the run up to the financial crises, and later the Secretary of the Treasury, claims that no one knew housing prices could fall. He sounded like a very silly man when he said over and over on his recent book tour that sophisticated financiers didn’t understand the dynamics of a housing bubble. I never once heard him mention well-documented fraud, despite the massive fraud uncovered by Congressional investigations.