Jim Ulvog

Change in massive organizations is slow. Here are a few articles on the speed of compliance to prevent future fiascos.

4/1 – Wall Street Journal – HSBC Monitor Says Bank’s Compliance Progress Too Slow and 4/1 – Deal Book at NY Times – HSBC Is Deemed Slow to Carry Out Changes – Quarterly report from the monitor on the 2012 DPA says he thinks the bank is not making enough progress on improving the anti-money laundering program. HSBC is now in year three of a five-year DPA.

On the other hand, progress takes time…

4/2 – This is Money at Daily Mail – Senior HSBC executive privately admits another major regulatory breach is ‘cast-iron certainty’, according to reports – This report got lots of coverage. I think it was reported elsewhere earlier than this article.

A senior compliance officer reportedly said that there is a high probability of another major regulatory violation at some point in the future. Several commenters and one headline I saw spun this as meaning the bank intends to break the law again.

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Bank fiascos – slow progress on changing cultures to prevent the next fiascoRead More »

For future reference, I’m accumulating reference points for illustrating the magnitude of the huge bank settlements we are seeing.

Previously mentioned the annual billings of Big 4 accounting firms. Here are two more reference points –

Election cost in U.S. – $4B / $6B / $10B – According to this site (which was the first one I found that had the info I wanted so I stopped looking), the cost of congressional elections was $3.6B in 2010. The cost of congressional and presidential elections in 2012 was $6.3B. So the federal elections in 2010 and 2012 cost $9.9B.

Cost to build a new aircraft carrier – $13B – Construction cost of the newest aircraft carrier, the U.S.S. Gerald Ford, is estimated at $12.8B per Wikipedia.

Settlement talks are apparently progressing in a large class action suit against the big banks for manipulating foreign exchange rates.

Wall Street Journal reports on 3/17 that Citigroup, Barclays Close to Settling Forex Lawsuit With Private Investors.

Rumors are those two banks may settle with a group of investors for $800M between them.

According to the article, here’s the current status:

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Scoreboard for private settlements of Forex litigationRead More »

After reading the data for the 100 largest accounting firms, I realized the CPA industry can provide a frame of reference for the magnitude of fiascos we are seeing in the banking industry. Discussion of that article is here.

My wild guess is here for the total fines for manipulating forex rates: a range of $11B to $16B with point estimate of $13B.

Sixteen billion is just a number with lots of zeros. Let’s look at that number in relation to revenue in the CPA profession.

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A new metric for measuring the size of bank finesRead More »