The FT has reported this morning that:
JPMorgan Chase's earnings were hit by $1.1bn in new legal charges as the largest US bank prepares to settle looming charges over foreign exchange manipulation by the Department of Justice.
The amount takes the bank's disclosed legal charges to more than $25bn since 2010
That, apparently, is a year's profit, which should worry investors.
But, the real question is this: how bad does a bank's legal compliance have to be before it is deemed not fit and proper to be a bank?
Surely paying a quarter of your income in finds is enough to say that point has been reached?
And if not, why not?
Or is it that "too big to fail" is just "too big to ever let go, whatever happens"?
If so, that's another reason to worry.
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Honest guv’, I was only stimulating economic growth.
Case dismissed!
deja vue all over again!
The big banks combined can shut down the economy, end most trading, simply by having an extended holiday. The politicians can’t send in the army to run banks like they can with the firemen. That means the banks are effectively in charge. It’s time this was better understood. The way to combat it is to support alternative currencies or scrips, bitcoin even, so even if the banks shut down we can still trade at a basic level. Till there’s enough alternatives working to facilitate that, the banks are in charge and will do as they please as a consequence.
Strategically I would support a state ran banking chain.
Doing this might send out a signal to the other so-called banks that if you mess up, we will not bail you out but use the state owned bank to distribute real cash that the Government prints in case of a banking meltdown. Then maybe these ‘banks’ might be a little more careful. Maybe!
That is what I would like to see.