When Giant Banks Pay Fines, Where Does the Money Go? Does It Stop Crime?

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http://www.alternet.org/economy/bank-fines-and-crime



If somebody broke into your home and stole your belongings, you’d expect to see some serious consequences if they got caught. But when banks and financial firms rob, defraud and mismanage the money of Americans—and even cast them out of their own homes illegally—the worst that usually happens is a fine.

Since the recent financial crisis and housing collapse, some of Wall Street’s biggest banks have faced fines from regulators reaching into billion-dollar territory. In the latest news, JPMorgan Chase is looking at $11 billion in fines for pushing crap mortgage securities on unwary investors.

That sounds like a hefty amount of cash—it’s about the gross domestic product of Kenya, and tops that of Iceland and Bahrain. As journalist Pat Garafalo has noted, $11 billion is equal to what all the major banks paid together in 2012. The sum would be the largest single financial fine in history, if in fact it ever is paid (JPMorgan Chase is reported to be in negotiations that might reduce it).

So what happens to all that dough? Will it really change anything?

Let’s follow the money trail.