Rabobank, based in Holland, will pay a 774M Euro fine, or about $1.065 billion, to U.S. and European regulators. That according to a Reuters report today: Dutch Rabobank fined $1 billion of Libor scandal.
Regulators in Japan forced Rabobank to increase their compliance staff in Japan after the bank was caught trying to manipulate the Yen Libor.
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Dutch bank fined over $1B for manipulating Libor Read More »
JP Morgan settled up with Fannie Mae and Freddie Mac. JPM will pay:
That’s from the article J.P. Morgan Settles With FHFA, in the Wall Street Journal.
This is part of the larger $13B package under negotiation earlier this week.
My head scratching continues about why Morgan is on the hook for loans made by other banks it acquired at the urging of the feds. …
Some details firming up on that $13B settlement Read More »
I’m confused by the reports that JP Morgan is close to settling most of the claims against the bank by the federal government in return for a payment of $13,000,000,000.
On one hand…
There are several parts of the long list of Morgan scandals that fully justify punishment, in my opinion. Consider manipulating Libor or prices in the energy market as just two examples.
Since the options of either public flogging or liberal application of feathers preceded by tar are not possible with a corporation, a decent fine would be a good start.
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Scratching my head over that $13 billion settlementRead More »
Scratching my head over that $13 billion settlement Read More »
A few links and comments of interest to auditors:
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More good stuff for auditors – 9-16-13 Read More »
Deloitte Financial Advisory Services agreed to a $10M fine from the N.Y. Department of Financial Services and a one year ban on new work for state chartered banks.
The consent agreement between the state regulators and Deloitte Financial Advisory Services can be found here.
What’s the problem?
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Deloitte penalized for anti-money-laundering work done for Standard CharteredRead More »
Deloitte penalized for anti-money-laundering work done for Standard Chartered Read More »
When the vice chairman of the FDIC is concerned about the subsidies going to the too-big-to-fail banks and calls it corporate welfare, you know something is wrong.
The generous federal insurance gives the large banks an advantage. The extra-large unlimited insurance that ran until last December multiplied the advantage. Their too-big-to-fail status means they can take more risks that otherwise. They need not fear heavy enforcement action because the U.S. Attorney General has said what many previously realized – enforcement action against them would create market turmoil. The combination of retail and commercial banking means the deposit insurance is subsidizing them taking positions in the market.
Those issues and more are outlined in Mr. Thomas Hoenig’s article in the Washington Post – Stop subsidizing Wall Street.
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Corporate welfare for Too-Big-To-Fail banks Read More »
The president and EVP of the Dallas Federal Reserve Bank have three suggestions in the Wall Street Journal on How to Shrink the ‘Too-Big-To-Fail’ banks.
The problem
Only 0.2% of the US banks control 70% of the assets in the industry. Those few banks are two-big-to-fail, too-big-to-jail, and even too-big-to-prosecute. They get special treatment from the federal government, specifically an explicit guarantee they won’t be closed, which gives them lower borrowing costs which means they have a government-sponsored competitive advantage.
Why that matters
Here are a few consequences mentioned in the article: …
Suggestions from two Fed officials on reducing the dangers of Too-Big-To-Fail banksRead More »
Suggestions from two Fed officials on reducing the dangers of Too-Big-To-Fail banks Read More »
That is the core point of a new book, The Bankers’ New Clothes, reviewed by John H. Cochrane in the Wall Street Journal – Running on Empty – Banks should raise more capital, carry less debt – and never need a bailout again.
Federal policy guarantees essentially all bank deposits. That creates moral hazard, which means banks can take extreme risks and depositors don’t care. The feds are on the hook for any failure, so why should bank management or depositors worry about risk levels? To mitigate risk, the regulators have thousands of pages of rules on the asset side of the balance sheet. Check this out: …