So, the Justice(?) Dept. put a hit on B of A for $16.6 billions of dollars. Seems like a sizable fine of sorts. But it didn't put the bank out of business and it hardly registered against its stock price. The bank has long argued that the financial situations at Countrywide and Merrill Lynch, which they took over at the behest of Treasury Dept., SEC, Comptroller of Currency, etc., were at the core of the violations of banking laws.
However, it is apparent from both the size and scope of the fine that the Justice Dept. and the enforcement side thought otherwise. Packaging mortgages with dubious quality became a standard practice, leading, in part, to the financial meltdown in 2008.
One must ask the question today: are the big banks completely corrupted by size alone? It seems after years of close scrutiny, nobody knows what goes on among the various departments in any of the big banks. Regulators, faced with all the issues of a large bureaucracy, can hardly keep up with their own rules let alone the inside workings of the regulated institutions. So, the legal departments continue to engage in the game of cat and mouse: keeping one or more steps ahead of the frustrated enforcers who are breathing down their collective necks.
Recently, Deutsche Bank has been the subject of review based on a whistle blowers complaint that their investment arm has been giving inside information to hedge fund customers ahead of the pack. Arbitration of the accusations appear to be stymied from the inside.
And so it goes. Bryan Moynahan, president of Bank of America, will now be able to proceed with his goal of expanding the bank in the coming years and raising shareholders' stock valuations. Good luck, Bryan, but I believe the regulatory minefield will only be temporarily open for safe passage.
Another look at cross state, international banking is definitely warranted.
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