In a couple of days, the so-called US Justice Department will be announcing an “agreement” reached with five large banks, including two of the largest in the US – JP Morgan Chase and Citigroup, the holding companies for Chase and Citibank – under which these banks or bank holding companies will plead guilty to felonies involving the manipulation of international currency markets.
This is not really a plea deal, or what in the lingo of criminals is called “copping a plea.” It’s a negotiation in which the nation’s top law-enforcement organization – the one that just sentenced a teenager to death in Boston in the Marathon bombing case, and that routinely sends ordinary people “up the river” for minor drug offenses or even tax fraud – is taking seriously these banks’ concerns that if they plead guilty to felonies they might be barred by SEC rules from engaging in many profitable practices. So – get this – the Justice Department is seeking assurances from the commissioners of the Securities and Exchange Commission that they will not enforce those rules against these particular felonious banks.
There will be fines, of course, though nothing that will even dent the profits of these megabanks, which also include two British-based institutions, Barclays and the Royal Bank of Scotland, as well as the Swiss-based bank UBS. But under these deals, not one bank executive will even be forced to quit his post, much less face jail time or even a fine. As the New York Times put it in an article last Thursday, “In reality, those accommodations render the plea deals, at least in part, an exercise in stagecraft.”