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Outrage Won’t Stop Criminal City of London-Wall Street Megabanks, but Glass-Steagall Will

Sept. 28, 2020 (EIRNS)—“I am furious,” begins an op-ed in the big German broadcaster Deutsche Welle, by Editor-in-Chief Manuela Kasper-Claridge. “FinCEN Files Should Trigger Outrage” is her headline. She is outraged: Once again, secret files acquired by investigative journalists have proven that Deutsche Bank, HSBC, JPMorgan, Standard Chartered, and other behemoths of the City of London and Wall Street engaged in massive criminal money-laundering—$2.3 trillion just from this small batch of 2,500 pages of suspicious activity reports (SARs)—for drug cartels, terrorist gangs, mafia, billionaires, arms runners, and so forth. The megabanks usually collected fees for the illegal transfers long before they filed any SARs, if they did file at all. Goldman Sachs bankers, for example, filed no SARs at all while facilitating a grotesque $7 billion embezzlement by Malaysia’s former prime minister, for which Malaysian prosecutors have, belatedly, finally thrown the book at them.

“But where is the public outrage?” asks Kasper-Claridge. “Where are the calls for heads of banks to resign? Instead, the news has mostly been met with widespread indifference and resignation, with most people seeming to think that nothing can be done about such things.” People are being killed by these bank crimes, she says, correctly. Finally she ends up with this: “To counter this, we need well-functioning national and international supervisory authorities that employ the best in the business. Criminal money flows must be stopped. In the end, our money is at stake. That’s more than enough for us to be furious.”

As if in punctuation, two more Deutsche Bank traders were convicted by U.S. prosecutors on Sept. 24 for fraud in manipulating gold and silver prices, according to Bloomberg News. But these are only two traders at a huge, de facto bankrupt banking behemoth which should have been nationalized and its top executives arrested at any time in recent years.

If Editor-in-Chief Kasper-Claridge feels real, active outrage at this City of London-Wall Street cesspool, she will editorialize for the solution: Not “supervisory authorities that employ the best in the business” or similar fluffery, but break these gigantic crime centers up. Everyone knows that just a few decades ago, such giant marauders did not exist, because of the Glass-Steagall principle of bank regulation.

The reason for this continuing atrocity, with multi-trillion dollar-asset banks being bailed out by governments and central banks while committing and abetting dangerous crimes from A to Z, has been crystal clear since 2011. In that year the Senate Permanent Investigations Subcommittee headed by Carl Levin revealed the worst money-laundering crimes ever seen, by HSBC. The bank in Mexico had laundered $678 million for the Sinaloa Cartel, giving the drug bosses specially made cartons in which to present $10,000 at a time to tellers in cash; had done the same for other drug cartels; had laundered billions in collaboration with a Saudi bank which was funding terrorist organizations; had violated the U.S. Trading with the Enemy Act, and more.

After exhaustively proving these crimes in hearings, Levin referred them to the Obama Justice Department, which imposed fines but conducted no criminal prosecutions. When Attorney General Eric Holder was asked why, at a 2012 press conference, he answered that if he took away a financial giant’s banking license and prosecuted its executives, he would worry about whether he might crash the banking system. For any honest citizen listening to Holder, outrage was supposed to give way to fear—fear of another 2007-08 global financial crash, or worse, if the London and Wall Street megabanks’ speculations and crimes were hit hard.

The only action which can resolve this horrifying situation, is re-enactment of the Glass-Steagall Act in the U.S. Congress and in at least the European nations—China is currently under a Glass-Steagall bank regulation. Break these banks up into normal-sized pieces, make them sell off their speculative divisions in order to keep a commercial banking license; nationalize and remove management where necessary, as with the disastrous Deutsche Bank. Then serious prosecutions will occur and, more important, commercial banks will actually provide credit to rebuild physical economy.

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