The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Senator Elizabeth Warren wants to know what it would take to shut down a big bank guilty of engaging in money laundering for drug cartels.

HSBC admitted in court late last year that it helped launder $881 million for Mexican and Colombian drug cartels, along with continually violating sanctions on Iran, Libya, Burma and the Sudan. Though the bank paid a $1.2 billion fine, not one bank employee has faced criminal charges related to the trafficking.

The London-based bank is still operating in the United States.

In a hearing entitled “Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement,” Warren continually asked Treasury officials a version of the same question: “How many billions of dollars do you have to launder for drug lords and how many sanctions do you have to violate before someone will consider shutting down a financial institution like this?”

Treasury officials asserted that they do not have the power to shut down a financial institution. They said that power belongs to the Fed and such an action would be be triggered by a criminal conviction, which would be have to be pursued by the Justice Department.

Attorney General Eric Holder, the head of the Justice Department, told a Senate committee Wednesday that the size of big banks “has an inhibiting influence – impact on our ability to bring resolutions that I think would be more appropriate.And I think that is something that we – you all – need to consider.”

And this is why the big banks never wanted Elizabeth Warren in the United States Senate.

(Hat tip to David Dayen.)

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

For a long time, inflation has been the phantom of the American economy: often expected but never seen. But the latest Consumer Price Index, which showed that prices rose by five percent from May of last year to May of this year, raises fears that it is breaking down the front door and taking over the guest room.

The price jump was the biggest one-month increase since 2008. It appears to support the warning of former Treasury Secretary Larry Summers, who wrote in February that President Joe Biden's budget binge could "set off inflationary pressures of a kind we have not seen in a generation." Senate Republican leader Mitch McConnell charged last month that the administration has already produced "raging inflation."

Keep reading... Show less

Close