Bank Leaders Condemn Themselves

By William K. Black
Bloomington, MN: Valentine’s Day 2015

If you inhabit the reality-based universe you know that finance has become a parasite that is a leading threat to our economies and democracies. A series of financial regulators – each of them infamous for their slavish apologias for bankers and banking – now admit that our most elite banks and bankers have created corrupt cultures that have turned the world’s largest banks into the world’s largest criminal enterprises.

How have top bank leaders reacted to this corruption? There is a new report out that asked bank leaders that question.

“Of note, the Industrial Products industry is the only one that views the risk related to the organization’s culture to be a ‘Significant Impact’ risk. It is interesting that other industries, particularly Financial Services, do not view this risk to be more significant given the recent spree of cultural lapses that have been reported.”

Bank leaders aren’t worried about their corrupt cultures or endemic frauds – they view their most “significant” risk to be regulatory interventions that might stop their frauds and send them to prison.

“The Financial Services and Energy and Utilities industries rated only one risk – regulatory changes and regulatory scrutiny – as a ‘Significant Impact” risk.’”

Yes, that is precisely our job as financial regulators – providing effective “scrutiny” to break the Gresham’s dynamic caused by elite bank frauds. Fraudulent bankers recognize that we are their only “significant” risk because we are the only ones they cannot hire and fire. Only our criminal referrals, training, documentation, vigor, and expertise can lead the Department of Justice to prosecute elite bankers for the frauds they lead. Listen to the bankers – and insist on recreating effective, vigorous regulation. The elite bankers won’t fix the culture of corruption. They created the culture by setting the corrupt “tone at the top.” They are desperate to prevent real regulators from successfully undertaking the Herculean labor of cleansing the modern Augean stables of the City of London and Wall Street.

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