I was thinking yesterday about what I would "blog about " today. Didn't want to do more Olympics . Most other headlines have been about sad , horrific events . Then lo and behold, staring me straight in the eye was my story. Yes, the latest 2 Wall Street Scandals ;are the fixing of interest rates by big banks(Libor Scandal) and Knight Capital's out of control trading system that caused them $440 million in losses . Throw in MF Global , Facebook and JP Morgan and you have a "scandal stew ".
But despite all stated intentions to investigate, prosecute, regulate(master__te) etc, we all know the ultimate sanction will be a monetary penalty. It's an understanding. The regulatory agency needs the money and the bank can afford the penalty a million times over . They just pass it on to their "loyal customers " . So what happens ? They are good citizens until the next scandal . Did someone say " too big to fail " .
But guess what ? The banks will continue to do as they please if all that ever happens is they apologize and pay a multi-million dollar fine.. No fear. No respect. No deterrent at all! Carte blanche . They're playing with monopoly money.
There is one thing that will make them shake in their boots, and adhere to the law. Yes,
" three strikes and you're out". Make 3 major blunders and your "banking charter is pulled " . Now, that has some bite! Believe me, you'll see "banking angels " all over Wall Street. The culture will change over night.
Call it tough love! Something meaningful has to be done.
Wall Street analyst Steve "SEC " Goldman reporting.
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