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View Diary: LA Times: FDIC Covertly Settled “Scores” Of Bank Fraud Cases Since 2007 (113 comments)

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  •  Well there goes Sheila Bair's reputation (32+ / 0-)

    I was wondering why the practice spanned two administrations.  So did hers. I wonder if the new FDIC head is doing the same thing.

    She was appointed to the post for a five-year term on June 26, 2006 by George W. Bush. Bair served as a member of the FDIC Board of Directors through July 8, 2011.
    That's a bit confusing given the book she has written, etc., and the way she has been so outspoken.  Then again, consider how Brooksley Born was shut down by people like Larry Summers.  Bair may have been totally on board with this, or maybe she wasn't.  Given her lack of hesitancy in speaking out after she left that job, I think we will find that out soon.  I'm also curious about the precedents and curious to know how often this happened before Bair's term.  

    I'll be curious to hear what Bair has to say after this. Do these secrecy deals prevent her from speaking about it?  She has not hesitated to speak out before.

    Of course Hank Paulson of Goldman Sachs was put into the Treasury position around the same time that she started.  And then Geithner continued the work after him.  

    I think Yves' theory that the information was kept secret to minimize the chances of further law suits by other wronged parties is the best explanation, but Newsom's makes a lot of sense too.  It was just protection, in general. The same kind of protection that Bernanke provided by refusing to disclose which banks were running for their lives to the Fed and getting who knows how much in loans for who knows what quality collateral.

    Newsom said he couldn’t understand the shift, unless the agency doesn’t “want people to know how little they are settling for.”
    This means that bank customers and bank shareholders were not given information to make good decisions about which banks to deal with or invest in.

    So many powerful people protecting so many crappy banks.  Even small banks!  So basically, you don't have to be very big to be too big to fail, or so it seems.  Geithner's and Holder's excuses about how to prosecute the banks would endanger the economy just doesn't hold water.  The failure of these smaller banks would not have threatened the economy.  The S&Ls went down and the economy survived and in fact it thrived.

    Thanks for this diary and the sunlight, bobswern.  I had missed this story completely until I saw a comment late last night. It's so hard to keep up with the corruption.  I think the big story here, bob, is that the "too big to fail" and "too big to jail" excuse just doesn't hold water, does it?  I have never bought the "too big to jail" excuse from the start, but TBTF seem to have some merit.  With these smaller banks, it has no merit.  

    Here is another bit of investigative work that should be done.  After the secret settlements, were any of the banks that settled bought up by the behemoth banks?  In other words, did the TBTF banks have information about the settlements?  Big payouts don't rock their boat very much, but it would rock a smaller bank and perhaps make them an easier target for a buyout by a bigger bank (who really wouldn't want wrongdoings publicized).  All of that is speculation on my part.  It just doesn't make sense, all the secrecy, for smaller banks.

    I really am anxious to hear from Sheila Bair and people like Neil Barofsky.  Geithner won't have to answer any questions, I guess.  He's probably off shopping for a private island somewhere :) One with a lot of high ground.

    "Justice is a commodity"

    by joanneleon on Tue Mar 12, 2013 at 04:17:27 AM PDT

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