JP Morgan (Trading Losses), Barclays (LIBOR fixing) and now HSBC (Money-Laundering) — Better Enforcement Needed — You Think?

What is the recent story with multinational banks? First, JP Morgan (unsupervised trading losses). Next, Barclays (LIBOR fixing). And now  HSBC (money-laundering).

HSBC faces about $1 billion in fines for violating U.S. anti-money laundering controls intended to restrict financing of terrorism and other criminal activities. ING recently agreed to pay $619 million to settle claims for violating U.S. trade sanctions with Cuba and Iran.

U.S. financial regulation reaches not only U.S. financial institutions but also foreign banks impacting the U.S. as well as those relying upon the U.S. financial system.

These inexplicable bank transgressions have all occurred after the 2008 financial crisis and during this long and painful road to national and global economic recovery. These actions surely do not inspire much  confidence in the financial institutions and to a lesser extent in the regulatory oversight here and abroad.

 They seem to be hindering the recovery to a significant extent. How many of us, individuals and corporations, are paying higher interest rates for loans because of the LIBOR debacle.

It is about time we get more serious about managing the very large, global financial institutions. It does not seem that corporate leadership has learned  much over the last few years.

 Better national and foreign regulation is needed, for both economic and national security. Sooner the better.


About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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