*Look at these recent headlines:

“Treasury gains £1.1bn windfall from record fines on banks”

“Banks fines record £2.bn over foreign exchange rigging

“Bankers think they have to behave badly.”

“Bank of England’s chief currency trader dismissed amid forex-rigging scandal”

“World Bank walks own path on corruption cases”

“Wall Street greed and the corrupt global banking cartel”

“HSBC whistleblower spills Lynch evidence to Senate”

“HSBC Swiss tax scrutiny set to overshadow $21 billion profit”

“Telegraph editorial ‘makes no apology’ over HSBC coverage”

Telegraph owners’ £250m HSBC loan raises fresh questions over coverage

“Barclay brothers secured loan for loss-making company shortly before Telegraph reporters were allegedly discouraged from running articles critical of HSBC”

“Closer to home – “SEC on Friday sued Cayman Islands-based Caledonian Bank and four other companies, accusing them of taking more than $75 million from unregistered sales of “virtually worthless” penny stocks”’

Who caused the financial crises?

The banks will tell you “the financial crisis was caused by [US] government policy and lending to low-income borrowers”.

Former-Senator Phil Gramm, on the Wall Street Journal op-ed page, states that government regulators used the Community Reinvestment Act (CRA) to force banks to make loans to undeserving poor people and that Fannie Mae and Freddie Mac purchased doomed subprime mortgage backed securities to meet the affordable housing goals. This, he says, was the main cause of the crisis.

However, this has been debunked many times over.

David Sanchez in an article on Think progress goes further he says:
“The argument that CRA [Community Reinvestment Act] and the affordable housing goals caused the crisis have been debunked time and time (and time and time and time and time and time) again!”

He continues:

“The real causes of the financial crisis were predatory mortgage products, out-of-control securitization and derivatives markets, and the failure of government regulators to crack down on the massive risk being taken by our nation’s financial institutions. As chairman of the Senate Banking Committee, Gramm himself championed two pillars of the deregulatory era: the Gramm-Leach-Bliley Act, which repealed the Depression-era wall between commercial banks (those that take deposits and give loans) and investment banks (those that facilitate riskier investment activities), and the Commodity Futures Modernization Act of 2000, which blocked regulation of so-called “over the counter” derivatives. Most notably, the Commodity Futures Modernization act allowed financial instruments such as credit default swaps to expand without oversight, spreading the risk contained in subprime MBS throughout the entire financial system.

“The conservative campaign to repeat lies about the financial crisis over and over again does nothing to make their argument any truer.”
SOURCE: http://thinkprogress.org/economy/2013/08/15/2475531/no-lending-to-poor-people-did-not-cause-the-financial-crisis/

And where did the bail out money go the US government gave to the banks at the start of the financial crises?

It’s actually a secret.

http://www.foxnews.com/story/0,2933,470824,00.html

“It’s something any bank would demand to know before handing out a loan: Where’s the money going? But after receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending the money or they simply refuse to discuss it. “We’ve lent some of it. We’ve not lent some of it. We’ve not given any accounting of, ‘Here’s how we’re doing it,”‘ said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. “We have not disclosed that to the public. We’re declining to.” The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest? None of the banks provided specific answers. “We’re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars. The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion—about the size of the Netherlands’ economy—to help rescue the financial industry. There has been no accounting of how banks spend that money. “It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout. But, at least for now, there’s no way for taxpayers to find that out.”

Here’s why Wall Street has a hard time being ethical
2013-11-25, The Guardian (One of the UK’s leading newspapers)
http://www.theguardian.com/business/2013/nov/25/wall-street-hard-time-ethical

“My first year on Wall Street, 1993, I was paid 14 times more than I earned the prior year and three times more than my father’s best year. For that money, I helped my company create financial products that were disguised to look simple, but which required complex math to properly understand. That first year I was roundly applauded by my bosses, who told me I was clever, and to my surprise they gave me $20,000 bonus beyond my salary. When I did ask, rather naively, if this was all kosher, I would be assured multiple times that multiple lawyers and multiple managers had approved the sales. One senior trader, consoling me late at night, reminded me, “You are playing in the big leagues now. If a customer wants a red suit, you sell them a red suit. If that customer is Japanese, you charge him twice what it costs. ”Being paid very well also helped ease any of my concerns. Feeling guilty, kid? Here take a big check. I was, for the first time in my life, feeling valued for my math skills. Ego and money are nice salves for any potential feeling of guilt. After a few years on Wall Street it was clear to me: you could make money by gaming anyone and everything. The more clever you were, the more ingenious your ability to exploit a flaw in a law or regulation, the more lauded and celebrated you became. Nobody seemed to be getting called out. No move was too audacious. Traders got more and more audacious, and corruption became more and more diffused through the system. By 2006 you could open up almost any major business, look at its inside workings, and find some wrongdoing.”

If you want further interesting tidbits on bank corruption go to: http://www.wanttoknow.info/financialnewsarticles

I asked the question when will banking corruption end? I don’t think it will ever end. Money fosters greed and greed fosters corruption.

If you ever get behind with your loan payments watch the mountain of interest that will be applied.

Banks are too big to fail. They have employees who fail but still get huge bonuses – so they don’t go to another bank is the reason I was told.

Next time you look at your bank statement note all the additional charges that have been applied. A few dollars here and even more there. Multiply that up by the number of customers they have and we are talking big money. And don’t think going to another bank is going to be any different.

And when a media house owes a bank a lot of money you don’t write damaging articles about them. The UK Telegraph knows exactly the side their bread is buttered.

Me? No comment.

*EDITOR’S NOTE: We have a number of stories in today’s iNews Cayman with similar headlines [bamk corruption]. See how many you can find.