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Will Credit Suisse's Criminal Plea Make a Difference?
May 20 -
With Credit Suisse Group AG poised to become the first bank in more than a decade to admit to a crime in the U.S., regulators have been reaching out to some of the firm's biggest business partners to avert a panic, according to a person briefed on those communications.
May 19 -
The idea of bringing criminal charges against one of the nations larger banks has become untenable. The potential cost in jobs, probable shareholder losses and market turmoil would be horrific.
September 9
Forcing Credit Suisse to plead guilty to a criminal charge was supposed to offer proof that regulators are willing to get tough with banks that break the law.
But the day after the Swiss bank
Richard Tofel, president of the investigative journalism nonprofit ProPublica, said that Credit Suisse's criminal plea carries little weight:
If no usual criminal penalties, and no executives charged, what difference does it make if bank pleads to crime? http://t.co/96IkBG6Wla
Richard Tofel (@dicktofel) May 20, 2014
This sentiment was echoed by Robert Jenkins, a former member of the Bank of England's Financial Policy Committee:
@sabrush @eisingerj No one goes to jail. No material impact on the business. Shareholders pick up the tab. So where is the deterent?
Robert Jenkins (@RobertJenkinsUK) May 20, 2014
Some observers expressed frustration with the fact that Credit Suisse chief executive Brady Dougan apparently gets to keep his job:
@eisingerj @kevinroose If guilty plea on criminal activity does not compel replacement of bank CEO then what does? DOJ looks self-serving.
Larry Doyle (@senseoncents) May 20, 2014
But many commentators reserved their harshest criticisms for the federal and state regulators who designed the settlement.
Nick Verbitsky, who directed Frontline's "To Catch a Trader," took aim at New York Department of Financial Services head Benjamin Lawsky. Lawksy
@andrewrjohnson @jennystrasburg I can't believe Lawsky actually said you have to consider people's 'lives and careers'. Might be a new low.
Nick Verbitsky (@nbits60) May 20, 2014
BankThink contributor
@eisingerj #DOJ pretends to impart justice, #CreditSuisse pretends to repent #TBTF farce continues
MRodriguezValladares (@MRVAssociates) May 19, 2014
Independent financial consultant Tom Adams argued that the Obama administration has long been hesitant to take actions that might harm banks:
@RobertJenkinsUK @sabrush @eisingerj Presumably, no material impact on biz was point of settlement: hallmark of this Admin re fin. crisis.
Tom Adams (@AdvisoryA) May 20, 2014
The Guardian's Heidi Moore said that Credit Suisse's size and standing will allow it brush off repercussions from the settlement:
And the idea is hilarious that a "guilty" bank of Credit Suisse's stature would be shunned or shamed. Come on. http://t.co/YB9CtNY33F
Heidi N. Moore (@moorehn) May 20, 2014
Another tweeter pointed out that $2.6 billion in penalties is pocket change for Credit Suisse:
@dicktofel @moorehn It's all about the fine. Big numbers to us, but meaningless to the banks and government.
CarlToddHand (@CarlToddHand) May 20, 2014
Indeed, Credit Suisse's stock was performing just fine the day after the deal was announced, as the Huffington Post's Mark Gongloff wrote:
Credit Suisse guilty plea so damaging and harsh that its shares are only up 1% this morning $CS
Mark Gongloff (@markgongloff) May 20, 2014
But at least one observer found a silver lining in Credit Suisse's ability to emerge largely unscathed from the settlement.
@MattGoldstein26 It's actually good that the world isn't ending. Proves Too Big To Jail theory wrong.
Daniel Wright (@DanSWright) May 20, 2014
