Thursday, September 26, 2013

Are banks finally receiving the crackdown citizens wanted?

JP Morgan Chase & Co. is the largest US Bank, and was one of many whose investment banking division was at the heart of the 2007-2008 collapse. There has long been popular calls for the government to hold big banks more accountable, and today it looks like the government might be finally making good on its promise to do just that:

http://www.theguardian.com/business/2013/sep/26/jp-morgan-talks-penalty-sub-prime-bonds

"If the new payout reaches $11bn the bank will have had to pay $30bn in fines and settlements over the past four years"

This potentially huge settlement come on the heels of two fines slapped on JP back-to-back last week amounting to $920m & $390m each.

To put this into perspective, JP Morgan has over $2.5 trillion dollars in AUM as of 2012. So are the banks finally getting spanked, or is this just another cost-risk that JP took into consideration years ago?

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