Wrestling with Racial Equity
After the 2008 financial crisis, I spent a good deal of time serving as an expert on who was to blame when banking organizations failed. As I said later, what struck me most was how well examiners spotted trouble and then how little they did to correct it. One might have thought that the great financial crisis and its cost – $3.5 trillion worldwide just for taxpayers – would suffice to give examiners more gumption now. However, the details of the enforcement actions filed Wednesday by the Fed and OCC make it clear that, in at least one very big case, problems seen were still problems that only got worse. The discretion the Fed and OCC still have to decide when and how to sanction big banks remains only after pitched battles in 2010 with Members of Congress who didn’t trust regulators they thought unduly captive. Many of these Members are still sore losers. If they gain power in 2021, they’ll stop scolding and start legislating.

AL101220.pdf