VIENNA, Sept 30 (Reuters) - The European Central Bank's new banking watchdog will establish a whistleblower system to get tips on banks that may be breaking its rules and will set up independent audit teams to monitor each of the region's big banks, the head of the agency said.
The ECB is about to take on direct supervision of more than 130 big euro zone lenders in November after the results of stress tests are released late next month.
"Personally, I can promise you that our supervision will be tough and fair," Daniele Nouy wrote in a column published on the ECB website and in a number of newspapers. "And we will not shy away from being intrusive if we feel this is necessary."
Nouy said new ECB-led supervisory teams will supervise the banks "on a daily basis" and that generally the leader of each team will not come from the country where the bank is based.
"The ECB will also set up a reporting mechanism to encourage and enable people who come to know of individual banks' potential violation of relevant EU law to report such violations to the ECB," she wrote. "Such reports are an effective instrument to bring to light cases of commercial misconduct."
The ECB has begun "supervisory dialogues" with banks this week in which they get partial and preliminary findings of the health assessment of their balance sheets before a formal announcement in October tells markets which banks need to raise more capital and take other steps to bolster operations. (Reporting by Michael Shields; Editing by Larry King)
Amid all the coverage of Eric Holder’s resignation, I still haven’t seen a convincing answer to one question: Why didn’t the Justice Department, under his leadership, prosecute some of the senior bankers whose firms were largely responsible for the subprime-mortgage blowup and the Great Recession? It’s a gap in Holder’s record that historians will ponder at the same time they criticize his record on civil liberties, particularly his endorsement of the surveillance state, and praise him for trying to tackle some enduring problems in the American criminal-justice system, such as the imposition of long prison sentences for minor crimes and the scandalously high rates of incarceration, especially among minority groups.
While Holder and Breuer were partners at Covington, the firm's clients included the four largest U.S. banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co - as well as at least one other bank that is among the 10 largest mortgage servicers.
A particular concern by those pressing for an investigation is Covington's involvement with Virginia-based MERS Corp, which runs a vast computerized registry of mortgages. Little known before the mortgage crisis hit, MERS, which stands for Mortgage Electronic Registration Systems, has been at the center of complaints about false or erroneous mortgage documents.
Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. It was meant to speed up registration and transfers of mortgages. By 2010, MERS claimed to own about half of all mortgages in the U.S. -- roughly 60 million loans.
But evidence in numerous state and federal court cases around the country has shown that MERS authorized thousands of bank employees to sign their names as MERS officials. The banks allegedly drew up fake mortgage assignments, making it appear falsely that they had standing to file foreclosures, and then had their own employees sign the documents as MERS "vice presidents" or "assistant secretaries."
Covington in 2004 also wrote a crucial opinion letter commissioned by MERS, providing legal justification for its electronic registry. MERS spokeswoman Karmela Lejarde declined to comment on Covington legal work done for MERS.
A President doesn't pick people like Holder and Breuer for the top positions at the DOJ if he wants Wall Street criminals brought to justice...quite the opposite in fact.
That youtube is parody, of course, but it's also your answer, John Cassidy.
And, of course, the really amusing thing about all this is that the very people whom Obama and Holder and co. shielded went after Obama with ice picks and meataxes at every opportunity (although, in fairness, not as much directly as through proxies like Fox and the GOP). At least Cheney is unrepentently vicious, like his more noble and virtuous cousins, the hyenas. The banksters take the standard GOP route of being completely immoral and then loudly crying crocodile tears that blatant immorality is pointed out.
They would have given the game away if they had thanked him. As it was, when 2012 came around, they had the choice of supporting the great deal they had going, or getting an even better deal from Romney.
The risk was that Obama and company wouldn't stay bought. Apparently, the banksters knew that risk was minimal. After all, the big payoffs come when one goes back to the private sector.
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The department has put real housewives in jail for mortgage fraud, but not real bankers, saving their firepower for people who manage to defraud banks, not for banks who manage to defraud people.
Most of the “investigations” of financial institutions over the past six years have swiftly moved to cash settlements, often without holding anyone responsible for admitting wrongdoing or providing a detailed description of what they did wrong.
The headline prices of these settlements usually bore no resemblance to the reality of what they cost the banks. ... A recent series of securities fraud settlements with JP Morgan, Bank of America and Citigroup, which DoJ said cost the banks $36.65bn, actually cost them about $11.5bn. And shareholders, not executives, truly bear that cost.
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Most of the “investigations” of financial institutions over the past six years have swiftly moved to cash settlements, often without holding anyone responsible for admitting wrongdoing or providing a detailed description of what they did wrong.
I believe Holder was responsible for the advent of this policy in the Clinton administration
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A recent series of securities fraud settlements with JP Morgan, Bank of America and Citigroup, which DoJ said cost the banks $36.65bn, actually cost them about $11.5bn. And shareholders, not executives, truly bear that cost.
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