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2 of the world’s biggest banks could soon face federal charges

KP Whaley, Wisconsin Public Radio

An ongoing federal investigation is close to culminating in criminal charges against some of the world’s biggest banks, which could produce the first guilty plea from a major bank in more than two decades. 

Ben Protess, a reporter for the New York Times's DealBook, says that such a development would challenge the popular belief that Wall Street institutions have grown too important to the economy to ever be charged.

Protess, in an article for DealBook, said the charges would stem from several years of investigation into two banks: Credit Suisse, a large Swiss Bank that may have provided tax shelters to Americans, and BNP Paribas, a French bank that may have ignored U.S. sanctions on countries like Iran, Sudan and others. 

Although the banks are foreign, Protess said the impact of this prosecution should not be overlooked. “They are huge institutions within their countries, but they also have a huge presence in New York … and there is no way they can skirt or ignore U.S. laws,” he said.

Protess said the challenge for federal prosecutors is figuring out a way to penalize the banks without causing an economic catastrophe. He said they're working with the banks in order to accomplish this.

Marcus Stanley, policy director of Americans for Financial Reform, said he remains to be convinced that any U.S. Bank will be prosecuted. 

“We’ve had many, many opportunities to go after American banks in the years since the financial crisis — not just American banks, but specific individuals within those banks who were involved with what looks like fraudulent behavior, and …. we haven’t really seen the government do that,” said Stanley, who is also former senior economist at the U.S. Joint Economic Committee.

He added: “It’s striking that the high level executives who personally profited from the sale of what later turned out to be toxic assets, that imposed huge losses on investors and the economy, collected payments and bonuses from making those sales and they haven’t had to pay any of that back.”

Americans for Financial Reform is a coalition of more than 250 national, state, and local groups who have come together to advocate for reform of the financial sector. Members of AFR include consumer, labor, civil rights, investor, retiree, and community faith-based and business groups, along with prominent independent experts.