Why the $5.7 Billion Dollar Fine on Big Banks for Manipulating Global Currency and Interest Rates Is a Joke
By Carey Wedler
Global Research
May 22, 2015
On Wednesday, the Justice Department announced that 5 major banks will be fined a total of about $5.7 billion. The banks plead guilty to manipulating global currency and interest rates as far back as 2007. Citigroup, JPMorgan Chase, Barclays the Royal Bank of Scotland, and Swiss bank, UBS, will pay fines that symbolize the government’s desire to reign in the power of the financial elite.
The New York Times painted the fines as a win because while banks have entered guilty pleas before, they have always been from subsidiaries of the parent companies. This time, the parent companies themselves plead guilty.
While symbolically, the move appears to reprimand evil bankers, the reality is that such fines are miniscule compared to the profits banks reap. $5.7 billion dollars is nothing compared to the $40.24 billion net income that banks earned in the second quarter of 2014 alone. It was the second highest profit total in the last 23 years, surpassed only by 2013. Further, the fines are nothing compared to the trillions of dollars in bailouts that banks received at the outset of the financial crisis.
What is more unsettling about today’s DOJ tap on the wrist is that while major banks must pay $5.7 billion, in the first quarter of 2015, customers were charged $2.5 billion in overdraft fees. Three major banks (JPMorgan Chase, Wells Fargo, and Bank of America) took $1.1 billion of this total. Some 600 others raked in the rest. Still, the “earnings” made up only 6% of bank profits for the major three involved. Overdraft fees for a single year could easily cover the $5.7 billion charged to the banks today. This discredits the alleged effectiveness of fining financial institutions for these transgressions.
Though it is predictable that a government bought and paid for by bankers refuses to seriously address the stranglehold of their power over the economy and government, it is outrageous that the DOJ is attempting to portray such meager fines as a win for the people.
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