We are protesting tomorrow at Noon on the steps of the NY Public Library (5th Ave, south of 42nd Street).
It is easy to pick on HSBC and the ads in previous blog posts are wonderful. But the problem is not one bad bank. It is the whole system of megabanks that need to be broken up.
Yes, it is horrible that HSBC got away with money-laundering to drug cartels and terrorists, but it also horrible that Bank of America and JPMorgan Chase and others committed fraud while foreclosing on homeowners. No one was prosecuted for that, either. And, they continue to do it even after they “settled’ with the government and promised to stop.
And it isn’t just HSBC that was let off because officials feared “horrible consequences” if they were forced to close. That was the rationale for the near-trillion dollar TARP bailout in 2008 and the reason Treasury Sec. Tim Geithner felt he needed to divert the money intended for homeowner relief to “foam the runway” so the banks’ crash wouldn’t be too traumatic.
And it isn’t just HSBC that flagrantly ignored the law for many years. Almost every big bank is implicated in the LIBOR scandal. The Economist, not OWS, called it “the rotten heart of finance”.
The efforts at prosecution have been pathetic. The HSBC episode proves that Dodd-Frank has done little to address the problem (not that proof was needed).
Why do the megabanks continue to get away abusing the system?
Two basic reasons:
- the megabanks are so big that they can’t be allowed to fail because of fears of “horrible consequences” if they did.
- they are politically connected because of the revolving door of executives going in and out of government and the resulting intellectual capture of Washington, DC.
Campaign contributions don’t hurt either but are probably the smallest piece of the corruption.
In the words of Senator Dick Durbin, the banks “own the place”.
The only solution to this problem is to break up all the banks that threaten the economy. Even Alan Greenspan, long-time Fed Chairman and high priest of the economic establishment has said “Too Big to Fail is Too Big“.
Let’s send them this message. Join us tomorrow.