NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • Five Years After Lehman Brothers Fall, Big Banks Even Larger Pt. 2


    In contrast to workers and homeowners, banks fully recover from the financial crisis. -   September 15, 13
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

    Full Episode


    The Black Financial and Fraud Report
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    How the Ecuadorian Economy Grew in a Global Recession
    Swiss Bank That Facilitated U.S. Tax Evasion Continues To Avoid Prosecution
    Speculators Are Buying Up Vacant Properties With Mixed Results For Cities
    European Officials Pushing Austerity in Spain to Boost Corporate Profits By Repressing Unions and Wages
    Emerging Market Financial Crises Raise Concerns About Another Global Recession
    NC Republicans Raise Taxes on Working Families While Giving Huge Tax Breaks to Millionaires and Corporations
    JP Morgan Will Not Be Criminally Prosecuted for Its Role in Madoff's Ponzi Scheme
    Bill Black: Volcker Rule Approved But "Not Enforceable"
    Documents in JPMorgan settlement reveal how every large bank in U.S. has committed mortgage fraud
    First Wall Street Criminal Confession in a Generation...Still No One in Jail
    House Passes Deregulation Bill Written by Citigroup
    Justice Department Misrepresents JP Morgan Settlement
    Would Janet Yellin as Fed Chair Mark a Shift in Economic Policy?
    Financial Regulator Shutdown, Halts Investigations of Wall Street Crimes
    Government Close Down - Another Grand Betrayal in the Works?
    Wall Street's Latest Scheme Will Cost You More at the Gas Pump
    Five Years After Lehman Brothers Fall, Big Banks Even Larger
    Five Years After Lehman Brothers Fall, Big Banks Even Larger Pt. 2


    Audio

    Share to Facebook Share to Twitter




    The Real News is a vital answer to The New York Times, the house organ of the oligarchs. - Al Salzman
    Log in and tell us why you support TRNN

    Bio

    William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

    Transcript

    Five Years After Lehman Brothers Fall, Big Banks Even Larger Pt. 2JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I'm Jessica Desvarieux in Baltimore. We're continuing our conversation with Bill Black.

    Bill is an associate professor of economics and law at the University of Missouri-Kansas City. And he's also a regular contributor to The Real News.

    Thanks for joining us again, Bill.

    BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.

    DESVARIEUX: So, Bill, in our last segment we were discussing how systematically dangerous these too-big-to-fail banks that are now much bigger are.

    So can you--let's talk a little bit about the speech that Massachusetts senator Elizabeth Warren gave. She charged Washington as failing to take adequate measures to wind down too-big-to-fail banks. During her speech, she accused regulators of missing important deadlines, implementing regulations that would stem too-big-to-fail banks. Do you think Senator Warren will get a receptive audience in Congress and the regulatory bodies?

    BLACK: No, but over time she may get a more receptive audience. First, Dodd-Frank has nothing in it that would end the systemically dangerous institutions. So even if the regulators implemented all the rules that affect systemically dangerous institutions, none of them are designed to force them to do what needs to be done to shrink to the point where they're no longer systemically dangerous.

    DESVARIEUX: Okay. That's fair enough. And in our last interview, you mentioned the three de's as to why we are actually less safe. And there was an article in The Economist, last week's Economist, arguing that the global financial markets are safer now than they were in 2005. I can suspect that you wouldn't agree with that, with that case.

    BLACK: Well, it's actually sort of a trick question. The markets are still not in the same kind of bubbles that they were right before the crisis, at least the markets in the United States and Europe. So in that sense they are safe safer. But there's nothing to prevent them from going back into that, and they will eventually. And so we're more exposed to an even bigger crisis, and we have none of the three de's in place to stop it. In other words, we haven't put the rules back. We haven't regulated. We've still got with deregulation. We haven't put supervision back. We're still with desupervision with very weak supervisor leaders. And, of course, we haven't prosecuted anybody who was elite as a banker who caused the crisis. So there's no deterrence in that regard. So we're very bad in terms of not fixing the three de's, and that means that we're exposed to an even bigger crisis down the road.

    DESVARIEUX: Interestingly enough, in that article also they mentioned what made the global financial structure less safe was the fact that there was no guarantee that the government taxpayers really would bail out these banks. What do you make of that?

    BLACK: Well, taxpayers don't really bail out banks, but governments do. And that is something that we don't want to be doing. We want to avoid the crisis in the first place. And so that article, you know, basically acts like, well, you know, crises come and go. Well, no.

    The key to the three de's is shaping an intensely criminogenic environment. When you do that, you produce these epidemics of accounting control fraud that hyperinflate bubbles and cause financial crises. So the focus needs to be on ending the three de's and ending the systemically dangerous institutions.

    Now, I've mentioned that we haven't ended the systemically dangerous institutions, but it's far worse than that, because think of the big entities in the United States that failed. So that would be Wachovia, Washington Mutual, Merrill Lynch, Countrywide, Bear Stearns, those types of entities. Every single one of those that I mentioned was acquired by a bank that was already systemically dangerous. And this made them much larger.

    And in the initial piece, you gave statistics on what a massive percentage of the global GDP these banks are. But here's the bad news. That's only talking about--that figure you gave was only based on the banks' assets and the banks' reported assets. The banks' reported assets do not include, in general, massive positions on financial derivatives. And those positions on financial derivatives are not a 58 percent of the world's GDP; they are more like five times the GDP of the world. And they are growing massively and they are overwhelmingly concentrated in just a few of the largest banks.

    The further bad news is: even when we caught the systemically dangerous institutions in just unbelievably egregious fraud after fraud after fraud, murderous frauds, you know, doing the money laundering for one of the most violent drug cartels in Mexico for an entire decade to the tune of over $1 billion--that was HSBC, one of the largest banks in the world, and not a U.S. bank, right? So, politically you would have thought that would have been the great opportunity to cut one down to size and say, you must shrink to the point that you no longer pose a systemic risk. They not only didn't do that; they didn't prosecute HSBC, they didn't prosecute a single officer of HSBC, and they even refused to prosecute former officers of HSBC.

    So Elizabeth Warren is actually more right than she knows. The circumstances are far worse than she posited.

    DESVARIEUX: Bill, it's always a pleasure having you on. Thank you for joining us.

    BLACK: Thank you.

    DESVARIEUX: And thank you for joining us on The Real News Network.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    The Bundy Ranch Standoff Demonstrates Values Shared by Corporations and the Far Right
    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting