For the first time in two decades, Justice Department is finally coming down on the biggest Wall Street banks. JP Morgan Chase and Citigroup have plead guilty to a slew of crimes, including manipulating currencies, interest rates, and violating international antitrust laws with the collusion of two of Europe’s biggest banks, Barclays and the Royal Bank of Scotland. They have been served with $5.6 billion in fines in one of the biggest, most successful persecutions of Wall Street’s deceitful and exploitative way of doing business.
The charges are a glaring indication that the cheating practices that led to the 2008 recession are back in full force among Wall Street traders. The New York Times reported that the traders, conspiring in online chatrooms, called themselves “the cartel”, and warned a newcomer that “mess this up and sleep with one eye open.” One Barclays admitted that the entire scheme was to extort as much money as they could out of their clients, saying that the aim was to give “worst price I can put on this where the customers decision to trade with me or give me future business doesn’t change…If you ain’t cheating, you ain’t trying.”
It reveals that the fingers of the Wall Street banks are not only in the pockets of everyday Americans but are back to their old tricks, actively playing games with foreign currencies and plotting with each other to maximize their profits, no matter the consequences. It also is a stark reminder that greed is universal, and in a globalized world, the effects of Wall Street’s games have international repercussions.
Attorney General Loretta Lynch was unequivocal in her anger at the banks’ behavior. “Today’s historic resolutions are the latest in our ongoing efforts to investigate and prosecute financial crimes, and they serve as a stark reminder that this Department of Justice intends to vigorously prosecute all those who tilt the economic system in their favor; who subvert our marketplaces; and who enrich themselves at the expense of American consumers,”
Unfortunately, the “too big to fail” status also means “too big to jail”. Once again, the banks receive a slap on the wallet but are free to conduct business as usual, out of fears that any further action would have disastrous effects on international markets, so deep are these institutions entrenched in the global economy. Jimmy Gurulé, a former Treasury official and now a law professor, complained that “while the payment of these large fines may help to reduce the federal deficit, such penalties will do little to change the pervasive culture of corruption that currently exists in the banking sector. Real change will only occur when corrupt bank officials are indicted, convicted and sent to prison for their crimes.”
Bernie Sanders has it right. It’s time for America to break up the big banks. It’s too dangerous to allow these financial behemoths to continue playing God with the livelihoods and bank accounts of millions of people across the world. Wall Street has clearly learned nothing from the suffering they caused across the world by triggering the Great Recession with their greedy gambling. Now more than ever, hypercapitalism in America needs to be shackled and restrained. Banking should be boring.
Opinion columnist and former editor-in-chief of Occupy Democrats. He graduated from Bennington College with a Bachelor's degree in history and political science. He now focuses on advancing the cause of social justice and equality in America.