While senior Wall Street executives have been repeatedly tried in the court of public opinion and implicated by hundreds of whistleblowers within their own organizations, they have thus far escaped criminal indictment for the irresponsible behavior that fueled the 2008-09 financial crisis. The latest damning evidence came in
this week’s episode of “Frontline,” which shines a light on possible reasons why the executives who sank our economy and received billions in taxpayer assistance have not been held accountable.
In case you missed it, I highly recommend you take an hour to sit and watch this recount of the inexcusable hubris that led to the meltdown and the unexplainable failure to pursue criminal prosecution that followed. Words of warning: you might not be sitting down for long.
The program, titled “The Untouchables,” describes irresponsible mortgage underwriting standards written by Wall Street securitizers, risk officers who were directed to ignore faulty loans, and congressional inquiries that found prosecutors either unwilling or unable to pursue criminal investigations of senior executives.
Most distressing are revelations that the Justice Department has been hesitant to advance criminal charges because prosecutors are concerned about the impact of lawsuits on large financial institutions. The assistant attorney general of the department’s Criminal Division said he has lost sleep worrying not about the evidence of the case or the pursuit of justice, but about the result of such a lawsuit on the financial system as a whole. In other words, the health of the financial industry was a determining factor in whether to indict executives for fraud.
If this isn’t a textbook definition of the problem of too-big-to-fail, I don’t know what is. These financial firms are so large and so interconnected that they not only have access to lower-cost funding and to a seemingly limitless taxpayer backstop, but they are also immune from criminal prosecution. Have we come to a point where we truly have people who are above the law? Are we willing to accept that they are too big to jail? These individuals wrecked our financial system and have been allowed to walk away, bonus checks in hand, like nothing happened, leaving community banks to pick up the pieces under the weight of crushing laws and regulations enacted to halt such reprehensible behavior.
It is high time to restore sanity and accountability in our financial system. Too-big-to-fail firms should be downsized and split up. And while the executives of too-big-to-jail firms might think they are untouchable now, we should stand up to ensure they no longer have the ability to single-handedly drive our economy into the ground without facing consequences. Only then can we begin to restore our financial system to proper health.
While senior Wall Street executives have been repeatedly tried in the court of public opinion and implicated by hundreds of whistleblowers within their own organizations, they have thus far escaped criminal indictment for the irresponsible behavior that fueled the 2008-09 financial crisis. The latest damning evidence came in this week’s episode of “Frontline,” which shines a light on possible reasons why the executives who sank our economy and received billions in taxpayer assistance have not been held accountable.