Tag Archive for ‘Banks’
This week a Senate investigation detailed that HSBC had lax controls against money-laundering and often ignored warnings about clients with ties to drug cartels and terrorists. ProPublica has compiled a rundown of the bank’s blunders and blind spots as detailed in the Senate report.
Columnist Gael O’Brien speaks with Gallup Chairman and CEO Jim Clifton about a new book in which he argues that successful entrepreneurship and job creation are the most pressing issues facing the world. A critical part of addressing those challenges: the banking industry and its relationships with small business. “Banks,” says Clifton, “are one degree away from us, not six degrees.”
In March 2011, the Federal Reserve made a controversial decision to permit 19 leading U.S. financial institutions to pay out $33 billion to shareholders, including many of their own top executives. Pulitzer Prize winner Jesse Eisinger’s in-depth account of the Fed’s momentous decision sheds light on the inner workings of one of the most powerful but secretive economic institutions in the world.
While there’s no excuse for recent leadership scandals, Art Stewart writes, “it is also irresponsible to dismiss outright our own role in engendering a culture of duplicity, incompetence, and corruption as if it all could manifest from unsupported solo acts.”
Corporate governance expert Paul Strebel says there’s need for a “fundamental change” in the way board directors are nominated, with members of the nominating committee drawn from a more diverse group of stakeholders than has been the case. “To improve public trust in business, the search for board directors has to extend beyond the world of top executives,” he says.
Later this month, the U.S. Federal Reserve is going to let banks know how they did on its most recent round of “stress tests,” a follow-up to the tests the Fed conducted in the wake of the financial crisis. But reporter Jesse Eisinger says something seems different this time around. It’s almost as if the banks knew their results, even before the testing was complete.
Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history. Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses: They created fake demand.
When big banks have announced settlements with the Securities and Exchange Commission, ProPublica put those agreed-upon fines into perspective, and often found that even millions of dollars in fines aren’t too hard for these big financial firms to shell out. Judges, increasingly, seem to agree.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, widely considered to be one of the most comprehensive reforms of the U.S. financial industry in years, was signed into law on Wednesday. While many provisions of the Act relate primarily to banks and the financial regulatory system, the new legislation will also have a significant impact on corporate governance and executive compensation practices for public companies in general.
Bank of America agreed to pay $150 million to settle a civil complaint brought by the Securities and Exchange Commisison in connection with its acquisition of Merrill Lynch in the midst of the 2008 financial crisis. Even as the SEC settlement was being announced, New York State Attorney General Andrew Cuomo announced a separate lawsuit against Bank of America