Bank of America likes to top rival J.P. Morgan Chase in as many ways as possible. Except one. The $16-to-$17 billion check it is about to write to cover the fine for sins committed before the financial crisis tops the previous record of $13 billion paid by J.P. Morgan Chase just nine months ago. Add fines paid by Bank of America in connection with other activities, and the total take from the bank’s shareholders easily tops $22 billion. That’s certainly is real money, but not so much as to prevent Bank of America from raising its dividend last week. In fairness it must be said that the bank’s CEO, Brian Moynihan, has reason to feel aggrieved: the fines it is about to pay relate to mortgage-market misconduct by two bankruptcy-threatened financial institutions it did not own at the time, but bought under pressure from the Federal Reserve Board and the Treasury Department, which government agencies feared a worsening panic if those institutions failed. If you want loyalty and understanding from the government, the saying goes, buy a dog.
Other malefactors of great wealth, to borrow from populist president Teddy Roosevelt, include Standard Chartered and other foreign banks, who have contributed about $15 billion to the government’s haul. The total take stands at something like $120 billion, with an estimated $150 billion still to come, partly as a result of the regulators’ decision to increase fines so as to reimburse communities adversely affected by the financial crisis. A cynic might think that these fines are less about bank regulation and more about creating a large pot of cash for the feds to distribute as benefits to friends.
