Posts filed under “Regulation”

Top 10 Bank Fines (Post 2008-09 Crisis)

Fines here, fines there, fines everywhere!

The Wall Street Journal discusses the proposed $11 billion dollar JPM fine, but  buries the good stuff in this morning’s article on Jamie Dimon (This Generation’s Greatest Banker! ®)

We have been tracking JPM’s fines, but if you want an industry overview, try this collection: Here is a quick

Top 10 Bank Fines

$25 Billion for Foreclosure processing abuses.
Five Banks: Wells Fargo & Co., J.P. Morgan Chase & Co., Citigroup Inc., Bank of America Corp., Ally Financial Inc.
Regulators: U.S. Department of Housing and Urban Development, U.S. Department of Justice and 49 state attorneys general (2012)

$9.3 Billion for Foreclosure abuses.
Thirteen Banks: Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and 10 others
Regulators: Office of the Comptroller of the Currency and Federal Reserve (2013)

$1.9 Billion for Money-laundering
HSBC Holdings
Regulators: U.S. Department of Justice, Treasury and others (2012)

$1.5 Billion for Manipulating Libor rates.
Regulators: Commodity Futures Trading Commission, former U.K. Financial Services Authority, Swiss Financial Market Supervisory Authority, U.S. Department of Justice (2012)

$920 Million for Lack of oversight of giant bets by ‘London whale.’ (poor internal controls).
J.P. Morgan Chase & Co.
Regulators: Securities and Exchange Commission, Office of the Comptroller of the Currency, Federal Reserve and U.K.’s Financial Conduct Authority (2013)

$550 Million for materially misleading and incomplete information in sale of mortgage-related securities
Goldman Sachs
Regulators: U.S. Securities and Exchange Commission (2010)

$453.6 Million for Manipulation of  interbank lending rates (Libor).
Regulators: U.S. Department of Justice, U.S. Commodity Futures Trading Commission, former U.K. Financial Services Authority (2012)

$410 Million for Electricity market manipulation
J.P. Morgan Chase
Regulators: U.S. Federal Energy Regulatory Commission (2013)

$335 Million for Discrimination against black and Hispanic borrowers.
Bank of America
Regulators: U.S. Department of Justice (2011)

Note that the bad behavior generated big bonuses for execs based on the false (perhaps even fraudulent) depiction of profits. Now that this bad behavior has led to fines which resulted in the profits going away, shouldn’t those prior bonuses also disappear?

What should the shareholders pay for this?




J.P. Morgan Chief Dimon Meets With Holder
WSJ, September 27, 2013

Category: Bailouts, Corporate Management, Really, really bad calls, Regulation

Global Systemic Risk

click for ginormous graphic Source: NYU VLAB   I mentioned NYU’s VLAB earlier, but one more trick I wanted to share: You can drill down by region or even country to see how much risk is in the system. Note that this is a function of both size and riskiness, i.e., a very small reckless…Read More

Category: Credit, Fixed Income/Interest Rates, Regulation

New Measure of System Risk (circa 2008 Crisis)

Click to enlarge Source: Institute for New Economic Thinking     NYU prof Robert Engle, who long-time blog readers may recall from this post a ways back, won the Nobel prize for his work on Volatility. He has developed new ways to measure “Systemic risk” from his perch at the Volatility Institute at NYU: “We…Read More

Category: Bailouts, Corporate Management, Regulation

JP Morgan Fines Now More Than $8 Billion Dollars

Time to update the tally: Each year, JPM has profits of about $25 billion dollars on revenues well over $100 billion dollars. Part of the cost of generating that revenue in a variety of dubious and even extra-legal ways are fines. Since 2011, JPM has been fined $8B: $56 million (April 2011) $153.6 million (June…Read More

Category: Corporate Management, Legal, Regulation

SEC Regulatory Exemptions Led to Collapse

Go back and reread this post from this day 5 years ago: How SEC Regulatory Exemptions Helped Lead to Collapse Its quite amazing . . .

Category: Bailouts, Really, really bad calls, Regulation

WSJ: SEC Prosecution Fail

5 years after the financial crisis, the WSJ produces this enormous graphic about SEC prosecutions, and the lack thereof.

The key takeaway: If you can write a bog enough check, you do not really need to worry about breaking the law. Settlements are merely another cost factor, a cost of doing business.

After initially rejecting an SEC settlement with Bank of America, U.S. District Judge Jed S. Rakoff sums up this assembly line process: “While better than nothing, this is half-baked justice at best.”


click for complete graphic
sec action


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Category: Bailouts, Legal, Really, really bad calls, Regulation

Conservatives and Libertarians should Support the Return of Glass-Steagall By William K. Black     Glass-Steagall prevented a classic conflict of interest that we know frequently arises in the real world.  Commercial banks are subsidized through federal deposit insurance.  Most economists support providing deposit insurance to commercial banks for relatively smaller depositors.  I am not…Read More

Category: Regulation, Think Tank

Stumbling Towards Regulation

Wanna know the difference between Pulitzer Prize winning journalists like Jesse Eisinger and everyone else? Its this opening sentence:   “With their simultaneous display of hubris, remorselessness, incompetence and corruption, the banks have finally ignited a modicum of courage in banking regulators.” Pro Publica (also today’s NYT)   So awesome !  

Category: Corporate Management, Regulation

Click to enlarge Source: NY Magazine   Kevin Roose: Inspired by Matt Yglesias, I made the above chart to show how wrong all of these doomsayers have been. As you can see, after the Dodd-Frank Act was signed in July of 2010, the biggest investment banks on Wall Street experienced no real setbacks when it…Read More

Category: Cycles, Regulation

A Brief Refresher on Glass Steagall

Last week, I referenced the Warren-McCain bill to restore Glass Steagall. Earlier this morning, we showed Senator Warren discussing the bill on CNBC. The Squawkbox anchors revealed such a shocking ignorance of history, that we are compelled to offer a brief refresher on what Glass Steagall does and does not do. (Kudos to Senator Warren…Read More

Category: Bailouts, Really, really bad calls, Regulation, Television