HSBC: There Should Be No “Too Big To Jail”
Dec. 11, 2012
HSBC: There Should Be No “Too Big To Jail”
Statement of Robert Weissman, President of Public Citizen
There should be no such thing as too-big-to-jail financial institutions. But there is.
Today the Department of Justice has entered into a deferred prosecution agreement with banking giant HSBC, and the company has agreed to pay more than $1 billion in fines for anti-money laundering and sanctions violations. Assistant Attorney General Lanny Breuer says the company was guilty of “stunning failures of oversight – and worse” and that the “record of dysfunction that prevailed at HSBC for many years was astonishing.”
Published reports indicate that the Department of Justice declined to criminally prosecute HSBC because of fears of the impact of such a prosecution of a giant bank on the global economy. A smaller bank, presumably, would have received no such deferential treatment.
It’s not the case that HSBC and its executives escaped with no pain.
Nor is it necessarily the case that the Department of Justice operated irrationally. “In trying to reach a result that’s fair and just and powerful, you also have to look at the collateral consequences,” Breuer reportedly said at the news conference announcing the deferred prosecution deal.
However, what does seem clear is that the mere fact of its excessive size enabled HSBC to escape criminal penalties. In other words, it has been judged too big to jail.
The only way to avoid this unfair ability of giant financial institutions to escape criminal prosecution – and it is a virtual certainty that this situation will recur – is to break up these goliaths.
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