Essay on Bank Of The Great Recession
They bought thousands upon thousands of mortgage loans, packaged them together, and sold them off as securities – ALL WHILE KNOWING THAT A SUBSTANTIAL NUMBER OF THOSE LOANS WERE DEFECTIVE.
Why didn’t anyone go to jail? I mean, if no one did anything wrong and no one can be held accountable, why pay all these multi-Billion dollar fines?
Bank of America paid a $17 Billion settlement over mortgage fraud.
JPMorgan Chase paid $13 Billion.
Citigroup paid $7 Billion.
Morgan Stanley paid $3.2 Billion
And Goldman Sachs paid $5.1 Billion.
There are more, of course, and we may never know the full extent since many banks were bought up by other banks and some were allowed to fail, but you get the picture.
All in all, it’s just a sham.
Those billions in fines are a relative drop in the bucket of the $Trillions worth of mortgages bundled into securities.
Most of the banks actually end up paying far less than the stated amounts since they can take $2.615 billion in tax-deductible penalty, which at a 35 percent corporate tax rate equals a write-off of $915 million.
That means nearly $1 billion of the settlement is effectively financed by taxpayers.
And everything else gets paid by shareholders.
No one in charge actually has to hand over a billion dollars from their own pocket.
And if you take into consideration the fact that a company like Goldman Sachs didn’t pay out a penny for about a decade and their…