In the last 10 days:

• The LIBOR inquiry in London early last week revealed that the Bank of England pressed Barclays to lower their quoted rate.

• The next day it was discovered that Peregrine Financial Group was missing $215 million of customer money.

• Later we found out that for many years Peregrine was submitting falsified financial statements to the National Futures Association (NFA).  No one at the NFA independently verified these statements with the banks supposedly holding these funds.

• At the end of the week, JP Morgan’s quarterly call revealed that CDS prices were made up to the point that Q1 earnings need to be restated and a criminal probe is underway.  A similar mispricing of CDS at UBS led to prison time.

After the close on Friday we learned that the New York Federal Reserve (headed by Tim Geithner at the time) was aware of Barclay’s LIBOR scandal and essentially did nothing about it.

• Yesterday, as detailed above, we found out that HSBC has been used as a money-laundering and terrorist financing operation (Senate Probe Faults HSBC).

None of this should move the markets in the short-term on its own, but collectively it paints the financial industry as an out of control criminal organization with either incompetent or complicit regulators.

Today the reputation of bankers is between that of a used car salesmen and drug dealers.  The last 10 days has made it worse.

Category: Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “Can The Banking Industry Make It 24 Hours Without A New Scandal?”

  1. dawase says:

    No idea why this is surprising to anyone at this point. 100′s of people went to jail after the S&L nonsense. Now, if you’re caught breaking the rules, they just change the rules…

  2. EMichael says:

    Hey, I know a lot of decent used car salemen and drug dealers….

  3. dead hobo says:

    Actually, there are two distinct types of banking scandals …

    1) The criminal type where Banker A steals from someone and possibly gets caught

    2) The criminal type where Banker A gets caught stealing from someone in a way that meets social disapproval.

    I don’t read any complaints from Wall Street pros when Banker A games a pricing mechanism or jumps in the middle of a transaction and lets others in on the scam, even at the crumbs level. People only get uppity when they don’t get a cut of the action.

  4. Winston Munn says:

    Perhaps the invisible hand of laissez-faire needs to be replaced by the visible fist of prosecution.

  5. Iamthe50percent says:

    Instead of fines that only reduce the profit made on crime, people need to be put in jail, and not country club prisons with tennis courts. They need to be put in places like Attica and Leavenworth while personal fines put them into bankruptcy court.

  6. the FDIC should be Abolished. (and, needless to say..the FedRes, as well..)

    the USTreas should make Deposit/Transaction Accounts available to the Individual..

    “Private” ‘Bankers’ should be returned to their “Finance Company”-roots..

    then, We should ‘Play On’..

  7. VennData says:

    Geithner doesn’t regulate London, he asked them to fix it. You GOPers want something that isn’t so. Should BOJ have fixed Lehman Bros? What is needed is lots of investment in IT-based regulations that are deeply entrenched in the financial industry. Deeply, checking and cross checking with assets “held” at third parties… but the GOP fights this all the way. You clowns want the financial firms to have the freedom to do what they want. LOL.

  8. beaufou says:

    The libor affair is 4 years old, that tells you something about the level of corruption at the top of the finance and political pyramid. I am so absolutely disgusted by the whole system.

  9. lonr505 says:

    I absolutely am befuddled how a nation so obsessed with sports (and presumably the importance of good referee-ing) can’t take that lesson of the importance of an impartial referee and apply it to the entire economy.

    wtf! have people been that blinded by partisanship? I guess so.

  10. steveh18 says:

    O/T about the quote above: How many people has that been attributed to ?

  11. jaymaster says:

    “…complicit regulators.”

    Can we trust Geithner, who blatantly cheated on his taxes when he worked for the IMF?

    Can we trust Spitzer, NY AG and Governor at the time, who was also banging hookers on a regular basis? I wonder who paid for his excursions? Or who might have video taped, them?

    Or how about the Governor from that state across the river? You remember John Corzine, right?

    And these are just the liars and cheats on the “good” side of the law who got caught.

  12. Concerned Neighbour says:

    If anything this is bullish for banks. It demonstrates they can get away with all sorts of crap with no more than a slap on the wrist, if that.

    If only I were a headline writer:
    “Banks rally on corruption, fraud revelations”

  13. willid3 says:

    well. its just a symptom of how a free market acts when there is nobody watching. when the regulators (aka police) treat those they regulate (perps) as ‘customers’ how else would it work? those they get gored by the perps can’t sue them as they have no money to do so, let alone how some have ‘reformed’ that so that only if the shade of the moon, and the sun is in the right position, and nobody objects, can you sue.
    so lets have a lot more ‘free market’ cause corruption isn’t a problem for it at all. nor is criminality (unless you are at the bottom of the food chain). its just all bad PR, which after a few weeks, will be forgotten. and some media companies haven’t even mentioned it, because, well it just doesn’t fit their ideology, and others dont because its hared to explain, and there isn’t any blood involved. and maybe just maybe because they depend on the banksters to much

  14. carleric says:

    “it paints the financial industry as an out of control criminal organization with either incompetent or complicit regulators.”

    It only paints what it sees….why would anyone own a piece of any financial operation? They cheat, they lie, they obfuscate and they steal. A pox on all of them. Attica is simply too good for them….lets just get a rope and do what needs to be done

  15. Tarkus says:

    Wow. No wonder Hank Paulson wanted to save the system.

  16. Frwip says:

    @lonr505

    ” I absolutely am befuddled how a nation so obsessed with sports (and presumably the importance of good referee-ing) can’t take that lesson of the importance of an impartial referee and apply it to the entire economy.

    Wait, wha…. Have you ever watched the NBA ?

  17. constantnormal says:

    Who cares if the banking industry kicks out new scandals with the rapidity of ATM transactions?

    Nothing is done about them, it’s as if scandals are exhaled by the banking industry with every breath it takes … “bankster halitosis”.

  18. Robert M says:

    Major weight drug dealers at the level of JPM don’t let you eff them at all. They are far more honorable and honest.

  19. danvee says:

    Don’t worry folks, Mitt will take care of all this after he’s elected and the Repubs write a special reg or executive order allowing the TBTFs to relocate their operations to the Caymans!

  20. [...] Big Picture asks a good question: “Can the banking industry make it 24 hours without a new scandal?“ None of this should move the markets in the short-term on its own, but collectively it [...]

  21. bman says:

    Can we put some heads on stakes yet? Come on just a few, we can stick them up above the wall street sign!

  22. iamsosmrt says:

    Majored in finance. Totally disgusted by banking industry. What am I supposed to do for a career now?

  23. RothcoUDipthtick says:

    BR: I reckon you should do a WAPO column breaking the rigging of the stock markets, options, Forex by HFT programmes….rinsing out the spreads. Perhaps the ‘self regulation’ of the CDS market too.

    Think the appetite might be there now for more to come out and people to listen….maybe then we can begin the process of cleaning up this crap.

  24. [...] the banking industry make it 24 hours without a scandal? Lately, [...]