ataxiwardance

thenewrepublic:

Noam Scheiber on how megabanks corrupt regulators.

“Is it even possible to regulate megabanks in any meaningful sense? After all, if the allegations are true, officials at the Bank of England weren’t sending these hints to Barclays because they took a shine to Barclays’ executives or because they stood to benefit personally if the bank’s share-price rose. They were doing it because they worried that a run on a bank as big as Barclays would destabilize the British economy and wanted to do everything possible to avoid that, even if it meant skirting the rules (again, according to the allegations). 

Which is to say, in order to get corruption in your banking system, you don’t need literal corruption of the Government Official X owns shares in Bank Y variety (or even Official X wants to work at Bank Y after he leaves government). You just need banks big enough so that the bureaucrats keeping an eye on them have nightmares about what happens if the banks fail.”

–– Noam Scheiber, “How Megabanks Corrupt Regulators, LIBOR Edition“ 

ataxiwardance: Corporatist privilege is so integrated into our global financial system that regulators simply understand their role as enablers of a recalcitrant hegemony, rather than policemen over an open market. The new regulatory capture! No bribes required.

This is really where Occupy and Anti-Statists intersect.

I might also recommend Matt Taibbi’s recent post on the LIBOR scandal.

Whistleblower says BofA defrauded HAMP

While working at Urban Lending, Mackler said he saw BofA and its loan servicing subsidiary, BAC Homes Loans Servicing LP, implement “business practices designed to intentionally prevent scores of eligible homeowners from becoming eligible or staying eligible for permanent HAMP modification.”

The bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program, the complaint alleged.

BoA let through just enough HAMP modifications to avert suspicion and allay congressional critics, while not enough to incur any substantial losses to its own bottom line, according to the complaint.

“In other words, BoA has had it both ways. BoA has continued to maximize the value of its mortgage portfolio with anti-HAMP modification practices and managed to make money by committing fraud on homeowner,” the lawsuit said.

somepolitics:

fuckyeahfeminists:

Breaking: Five US banks being sued by Attorney General

December 1st, 2011 - A lawsuit has been brought against five major American banks today. Attorney General Martha Coakley of Massachusetts filed the legal action today in Suffolk Superior Court. The defendants include Citigroup, Bank of America, JPMorgan Chase, GMAC, and Wells Fargo. 

 “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law,’’Coakley said. “Our action today seeks real accountability for the banks’ illegal behavior and real relief for homeowners.”

Continue reading on Examiner.com Breaking: Five US banks being sued by Attorney General - Chicago Feminism 

I find it hard to believe that this will go anywhere, but HOLY SHIT I HOPE IT DOES.

Martha Coakley… CONFIRMED FOR BRAWL!

Did I mention that she’s a BU School of Law graduate?

Did I mention that Martha Coakley and Elizabeth Warren are basically HB(s)IC of Massachusetts?

Did I mention that sometimes States are the (virtuous) laboratories of democracy?

Hank Paulson’s inside jobs

USA TODAY: UBS whistleblower goes to Jail while those that committed the crime pay fines

Bradley Birkenfeld, 44, a former private banker for UBS, said his whistle-blowing exposed “the largest tax fraud in the world” and allowed the Internal Revenue Service to recover billions of dollars in lost revenue.

Birkenfeld, who handled wealthy American clients from 2001 through 2006, pleaded guilty in June 2008 to a single count of conspiracy to defraud the U.S. and was sentenced to more than three years in prison.

“I think it’s an injustice,” he said Friday as he reported to a federal prison to begin his sentence. “I’m a proud American who did the best I could for my country and this is how they reward me.”

Birkenfeld admitted helping clients hide hundreds of millions of dollars and evade U.S. taxes. His sentence has drawn criticism from whistle-blower advocates as too harsh because of Birkenfeld’s importance in exposing tax evasion at UBS.

The Swiss bank last year paid a $780 million fine to the U.S. and agreed to turn over the names of 4,450 suspected tax dodgers.

Stephen Kohn, Birkenfeld’s lawyer and the executive director of the National Whistle-blower Center, estimated his client was directly responsible for $2 billion to $4 billion in recovered taxes. As of November, nearly 15,000 U.S. taxpayers had come forward to disclose billions stashed in offshore bank accounts in 70 countries under a voluntary IRS program allowing most to avoid criminal prosecution as long as they pay what they owe.

“To take the whistle-blower who is responsible for the single largest recovery ever for the American taxpayer … and to put him in jail is a travesty of justice, it is a miscarriage of justice, it is grotesque,” Kohn said. “But worse, it is sending a chilling effect on the willingness of other bankers to step forward and do the right thing.”

Prosecutors have said Birkenfeld did not initially reveal his own misconduct. He denies that. Birkenfeld filed a complaint earlier this week against prosecutors, accusing them of making false statements to the federal judge in Fort Lauderdale, who sentenced him to prison.

Justice Department spokesman Charles Miller declined comment Friday other than to say that a judge rejected Birkenfeld’s argument for leniency.

Birkenfeld began providing inside information to U.S. authorities in 2007, describing how UBS helped rich Americans hide income from the IRS.

“The Bush Department of Justice didn’t expose this,” he said Friday. “I did.”

…

Editorial Note: This is a photo of Mr. Birkenfeld and this is photo of UBS CEO Robert Wolf playing golf with President Obama. One of these men committed massive tax-evasion against the United States and the other risked life and limb to expose it for the benefit of our citizenry. Guess who’s going to jail and who’s going to play another 18 with the president.

Key lesson from Iceland crisis is ‘let banks fail’

Three years after Iceland’s banks collapsed and the country teetered on the brink, its economy is recovering, proof that governments should let failing lenders go bust and protect taxpayers, analysts say.

The North Atlantic island saw its three biggest banks go belly-up in the October 2008 as its overstretched financial sector collapsed under the weight of the global crisis sparked by the crash of US investment giant Lehman Brothers.

The banks became insolvent within a matter of weeks and Reykjavik was forced to let them fail and seek a $2.25 billion bailout from the International Monetary Fund.

After three years of harsh austerity measures, the country’s economy is now showing signs of health despite the current global financial and economic crisis that has Greece verging on default and other eurozone states under pressure.

“The lesson that could be learned from Iceland’s way of handling its crisis is that it is important to shield taxpayers and government finances from bearing the cost of a financial crisis to the extent possible,” Islandsbanki analyst Jon Bjarki Bentsson told AFP.

“Even if our way of dealing with the crisis was not by choice but due to the inability of the government to support the banks back in 2008 due to their size relative to the economy, this has turned out relatively well for us,” Bentsson said.

Iceland’s banking sector had assets worth 11 times the country’s total gross domestic product (GDP) at their peak.

Nobel Prize-winning US economist Paul Krugman echoed Bentsson.

“Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net,” he wrote in a recent commentary in the New York Times.

“Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver,” he said.

During a visit to Reykjavik last week, Krugman also said Iceland has the krona to thank for its recovery, warning against the notion that adopting the euro can protect against economic imbalances.

“Iceland’s economic rebound shows the advantages of being outside the euro. This notion that by joining the euro you would be safe would come as news to the Spaniards,” he said, referring to one of the key eurozone states struggling to put its public finances in order.

Iceland’s example cannot be directly compared to the dramatic problems currently seen in Greece or Italy, however.

“The big difference between Greece, Italy, etc at the moment and Iceland back in 2008 is that the latter was a banking crisis caused by the collapse of an oversized banking sector while the former is the result of a sovereign debt crisis that has spilled over into the European banking sector,” Bentsson said.

“In Iceland, the government was actually in a sound position debt-wise before the crisis.”

Iceland’s former prime minister Geir Haarde, in power during the 2008 meltdown and currently facing trial over his handling of the crisis, has insisted his government did the right thing early on by letting the banks fail and making creditors carry the losses.

“We saved the country from going bankrupt,” Haarde, 68, told AFP in an interview in July.

“That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece,” he said, adding that the two debt-wracked EU countries “made mistakes that we did not make … We did not guarantee the external debts of the banking system.”