Is U.S. Crackdown on EU Banks Just the Beginning?

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July 8 (Bloomberg) -- Former federal prosecutor Douglas Burns and Bloomberg's Keri Geiger and Barry Ritholtz discuss the U.S. crackdown on European banks with Trish Regan on "Street Smart." (Source: Bloomberg)

Deterrent the financial community needs?

A fair observation and question.

What is interesting is if you look at the insider trading case , once you get into the investigation it is like branches of a tree.

They continue this way and that way.

I think that that is what is going on with the sanctions investigation.

They start here?

Guess what, they find out something else and then they are over here and over here.

It is hard to say this will take on some kind of death march, for lack of a better term.

So far it has only been european banks.


But it is almost like -- here we go again.

We are going to say that you violated our rules and we will get a big fine out of you.

The fed is going to make their money somehow, someway, right?

But he much.

Will this be a deterrent for future banks?

You have made the point before that the fact that no individual is being charged might be a problem.


Banks can pay the fines.

Commerce bank is expected to save about half of a billion dollars.

Bnp paid $9 billion, pretty much business as usual.

The stock has gone back up.

That does not seem to be a huge deterrent.

At least the market does not inc.


but if you force ceos to resign, people on boards to resign, then you might actually get the compliance department in shape enough where we are not seeing all of these cases, which are spread around the number of infractions.

Do you think that this is just the beginning?

I don't know.

Two interesting things come from this.

First, how long did it take before we saw any enforcement?

That was really treasury and, to a lesser degree, the department of justice's fear of disrupting the economy, which is not their job.

They should have enforced these rules earlier.

Second, i love the fact that her title is financial crimes reporter.

I know.

I was just saying that the other day.

There have been 22 banks over the last two years that have paid large, large fines.

Look at jpmorgan.

It is because the patriot act of 2002 date the u.s. government huge reach over foreign banks.

A good point on jurisdiction.

Even if they had just one account in the u.s.. make no mistake, when they sit down to negotiate these please the 800 pound juror -- 800 pound gorilla in the world room is charting deferred prosecution agreements.

As you pointed out, it is good for the u.s. treasury.

And for kerry.

[laughter] maybe it is a viable fine, but make no mistake about it, we lawyers are prohibited from making a phone call like that.

We are not allowed to threaten a criminal action.

Yet on many levels that is what goes on in these situations.

It sounds like extortion, the way you are describing it.

People have actually used that word.

Extortion is a dirty word, but at the same time hanging in the rafters is the fact that they have tremendous power to hit with a fine and they are discussing that and the civil read the best civil resolution.

Where they get away with it is that it is a criminal resolution, right?

We do see pretty severe criminal activity when they plead guilty.

It is not as though wrongdoing has not occurred.

Fines have to be paid.

Getting to the point where banks can plead guilty, which we have done for the first time this year, is a good milestone.

I love that doug burns calls it extortion.

He is a former federal prosecutor, he should know.

Make you so much.

This text has been automatically generated. It may not be 100% accurate.


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