US Attorney General believes large banks "Too Big to Jail"

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**Ouze**

source

Holder: Big banks' size complicates prosecution efforts
By Peter Schroeder - 03/06/13 02:00 PM ET

Attorney General Eric Holder suggested Wednesday that some financial institutions have become too large and are escaping full-fledged prosecution as a result.

Testifying before the Senate Judiciary Committee, Holder told lawmakers that he is concerned that some institutions have become so massive and influential that bringing criminal charges against them could imperil the financial system and the broader economy. His remarks come as a growing number of lawmakers have suggested that big banks are, effectively, "too big to jail."

"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," he said. "And I think that is a function of the fact that some of these institutions have become too large."

He suggested that prior attempts to bring enforcement against banks may have been stifled by their outsize influence, saying it has an "inhibiting influence ... on our ability to bring resolutions that I think would be more appropriate."

The Justice Department is required to consider the economic impact of its actions, but Holder's comments should bolster an increasingly vocal group of lawmakers that argue the nation's biggest banks have gotten too large and need to be curbed.

Sens. Chuck Grassley (R-Iowa) and Sherrod Brown (D-Ohio) pressed Holder on the issue in a letter sent in February, airing their disappointment that no major criminal charges had been filed against banks or their employees in the wake of the financial crisis. And Sen. Elizabeth Warren (D-Mass.) drew headlines when she blasted financial regulators during a separate hearing for failing to bring any major financial institutions to trial since the meltdown.

Grassley pressed Holder again on the issue during testimony Wednesday, at which point Holder said he essentially agreed.

"The concern that you have raised is one that I, frankly, share," he said, adding that ultimately the best deterrent would be if they could bring charges against individuals instead of companies.

However, he also added that all of the bad behavior on Wall Street leading up to the crisis may not necessarily have been criminal and that his criminal team has been "as aggressive as they could be."

Holder touted the Justice Department's efforts on financial fraud, specifically noting the government's civil suit against the credit rating agency Standard & Poor's, in which the government is seeking at least $5 billion in damages. The rater has said the lawsuit is without merit and is challenging it.

**Easy E**

So, is he laying the groundwork for anti-trust legislation to have them dismantled?

**KalashnikovMarine**

No he's taking kick backs instead

**Dreadclaw69**

So what he effectively did was give enough testimony to outrage the general public about the banks so he could lobby for more stringent laws, and also wash his hands of the lack of prosecutions to date.

**BlueDagger**

Man how I wish Fightclub would become real, *sigh*.

**daedalus**

Man, I wish I was in the old boys club.

**Grey Templar**

You're not cynical enough yet.

**whembly**

BlueDagger wrote:
Man how I wish Fightclub would become real, *sigh*.

As in "real fight clubs"?

Or, as in, "real terrorist" fight clubs?

**Ratbarf**

Real terrorists fight club.

**whembly**

Ratbarf wrote:
Real terrorists fight club.

Oh... then... naw, don't go there.

But, if ya'll wanna rumble?

Leggo:

**Vulcan**

"Too big to fail" should mean "too big to be allowed to continue at this size".

If the government needs to bail out a business because it would take down the economy if it goes bankrupt, it needs to be broken up into parts small enough to fail as part of the conditions of the bailout.

Other conditions should include terminating the complete executive board with no bonuses, golden parachutes, or any other form of severance pay - you ran the company into the ground, you get to feel the pain too.

**SagesStone**

I agree, it's too big a risk to be left as is.

**Ouze**

Vulcan wrote:
"Too big to fail" should mean "too big to be allowed to continue at this size".

If the government needs to bail out a business because it would take down the economy if it goes bankrupt, it needs to be broken up into parts small enough to fail as part of the conditions of the bailout.

I very much agree with this sentiment. I think it was a great failing of our government in 2007 when this wasn't done. I think that before a single taxpayer dime was spent, any bank getting funds should have had to pass the following criteria: if it failed because it broke our banking regulations, someone better be going to jail. If no banking regulations were broken, then clearly they were insufficient and should be revised.

However, in any event, I think a bank (or really any commercial entity) that has grown so large that it's failure would jeopardize the entire economy of the nation is a threat to the national security of the United States, and such an entity should be broken up under updated antitust legislation.

**whembly**

Ouze wrote:
Vulcan wrote:
"Too big to fail" should mean "too big to be allowed to continue at this size".

If the government needs to bail out a business because it would take down the economy if it goes bankrupt, it needs to be broken up into parts small enough to fail as part of the conditions of the bailout.

I very much agree with this sentiment. I think it was a great failing of our government in 2007 when this wasn't done. I think that before a single taxpayer dime was spent, any bank getting funds should have had to pass the following criteria: if it failed because it broke our banking regulations, someone better be going to jail. If no banking regulations were broken, then clearly they were insufficient and should be revised.

However, in any event, I think a bank (or really any commercial entity) that has grown so large that it's failure would jeopardize the entire economy of the nation is a threat to the national security of the United States, and such an entity should be broken up under updated antitust legislation.

Isn't that what happened to the Baby Bells decades ago?

**Ouze**

Yes, it is, under a consent decree.

**whembly**

Ouze wrote:
Yes, it is, under a consent decree.

Good find... I've got some reading to do...

I wonder if breaking up those Banks/GM would "save it".

**azazel the cat**

Time to go break out the ol' zaibatsu-bustin' shoes.

**Frazzled**

azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

**Fifty**

We are actually at the stage of many near-future RPG games and comic books, wherein the megacorps are essentially bigger than governments, and can run their own laws. He is essentially saying that the banks are more powerful than the US government. Does anyone think the banks will willingly rein themselves in? No, they just get more powerful to the point that they cannot be regulated by any nation, as they will threaten that nation with financial ruin.

**MeanGreenStompa**

Fifty wrote:
We are actually at the stage of many near-future RPG games and comic books, wherein the megacorps are essentially bigger than governments, and can run their own laws. He is essentially saying that the banks are more powerful than the US government. Does anyone think the banks will willingly rein themselves in? No, they just get more powerful to the point that they cannot be regulated by any nation, as they will threaten that nation with financial ruin.

That will require some form of... revolution to break them then.

**Frazzled**

Fifty wrote:
We are actually at the stage of many near-future RPG games and comic books, wherein the megacorps are essentially bigger than governments, and can run their own laws. He is essentially saying that the banks are more powerful than the US government. Does anyone think the banks will willingly rein themselves in? No, they just get more powerful to the point that they cannot be regulated by any nation, as they will threaten that nation with financial ruin.

Get serious. Half the banks in the world are now effectively owned by the governments - UK included.
Or I guess I can strap on my tinfoil hat and matching disco cape and shout - onward to the Revolution!

**Easy E**

Fifty wrote:
We are actually at the stage of many near-future RPG games and comic books, wherein the megacorps are essentially bigger than governments, and can run their own laws. He is essentially saying that the banks are more powerful than the US government. Does anyone think the banks will willingly rein themselves in? No, they just get more powerful to the point that they cannot be regulated by any nation, as they will threaten that nation with financial ruin.

This is why cyberpunk games are no fun anymore, you might as well just play a "modern" game.

**Ratbarf**

Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

Huh? We have more than 3 real banks. BMO, RBC, CIBC, Scotiabank, TD Canada Trust, That orange dutch bank.

My good african american, you just went terrible insult to the mentally handi-Capable.

**Frazzled**

Ratbarf wrote:
Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

Huh? We have more than 3 real banks. BMO, RBC, CIBC, Scotiabank, TD Canada Trust, That orange dutch bank.

Sorry, I keep forgetting BMO thinks its a real bank.

My good african american, you just went terrible insult to the mentally handi-Capable.

Er..what?

**Kanluwen**

Ratbarf wrote:
Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

Huh? We have more than 3 real banks. BMO, RBC, CIBC, Scotiabank, TD Canada Trust, That orange dutch bank.

My good african american, you just went terrible insult to the mentally handi-Capable.

I just want to say this is the single best correction of the bit from "Tropic Thunder" that I have ever seen.

If that is the word filter kicking in, I think I might have to send Legoburner a great big Microsoft Paint drawing of a heart.

**azazel the cat**

Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

I think there are seven major banks that operate in Canada (don't quote me on that number).

More importantly, we also have regulations to control our markets so that our economy is partially insulated from the boom-and-bust wankfest that gets worshipped elsewhere.

**Frazzled**

azazel the cat wrote:
Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

I think there are seven major banks that operate in Canada (don't quote me on that number).

More importantly, we also have regulations to control our markets so that our economy is partially insulated from the boom-and-bust wankfest that gets worshipped elsewhere.

You have three real banks and two smaller banks. You have protected financial markets and oligopolistic competition. So spare me the "US Banks R EVILZ!" spiel.

**Ravenous D**

Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

4 and they all survived the economic crash based purely on the fact we get user fees out the ass.

**Ratbarf**

Kanluwen wrote:
Ratbarf wrote:
Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

Huh? We have more than 3 real banks. BMO, RBC, CIBC, Scotiabank, TD Canada Trust, That orange dutch bank.

My good african american, you just went terrible insult to the mentally handi-Capable.

I just want to say this is the single best correction of the bit from "Tropic Thunder" that I have ever seen.

If that is the word filter kicking in, I think I might have to send Legoburner a great big Microsoft Paint drawing of a heart.

Sorry to burst your bubble, but it isn't the word filter.

I just figured that the mods wouldn't appreciate the actual quotation.

Frazzled wrote:
Ratbarf wrote:
Frazzled wrote:
azazel the cat wrote:
Time to go break out the ol' zaibatsu-bustin' shoes.

Look to your own banks first boyo. You literally have protected markets by law and what, three real banks?

Huh? We have more than 3 real banks. BMO, RBC, CIBC, Scotiabank, TD Canada Trust, That orange dutch bank.

Sorry, I keep forgetting BMO thinks its a real bank.

My good african american, you just went terrible insult to the mentally handi-Capable.

Er..what?

BMO is a real bank?

Unless you only consider investment banks real banks, and even then all of those banks have investment sections. Paul Martin just told them that no they cannot merge making a superbank and also set limits on how much they can borrow against their assets.

**Frazzled**

BMO is a nobody. Uncomeptitive slackjawed yokels.

But I don't have an opinion on the matter...