U.S. Piling-On Banks Has Gone Too Far: Phillips

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Oct. 24 (Bloomberg) -- Bloomberg Businessweek’s Paul Barrett and Charles Phillips, CEO at Infor Global Solutions, discuss the government probes and fines levied against JPMorgan and Bank of America for mortgage fraud stemming from the financial crisis. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

I think it is understandable that there was a great deal of inpatients in the sense that nothing was happening for years.

In fact, this is just a natural cycle.

We had a crisis where the banking system almost collapsed, and the government was not going to then step in and push things over the edge.

What you are seeing is it took the government several years to do investigations after the fix ups stage, and now we are seeing be follow from the investigations.

Charles phillips is also with us, the ceo of infor, and his long biography includes experience working with the government, technology, and morgan stanley as well.

What is your perspective here on the timing and the pylon the big banks -- the pile on the big banks?

Some of us had to happen.

I am not a big fan of demonizing be as big banks.

These banks were encouraged in some cases to make these acquisitions.

To save countrywide, bear stearns.

Now they're paying for it.

At the time when i was there, they were encouraged to make acquisitions to stabilize the markets.

For the health of the system.

But did they not ask enough questions?

There was not a lot of time to do a lot of due diligence.

These companies were going out of business and things had to be done so people stepped up your all, you know journalism the word -- stepped up.

Paul, and journalism, the word fair isn't it work.

When they stepped up -- they were begging them to step up.

In a word, i have to dissent, it is there.

Countrywide is no longer here to be punished.

Bear stearns is no longer here to be punished.

These banks were acquired at tremendous discounts, and now you're seeing some of the discounts being paid back.

Which is not to say that you should demonize the individual people.

The consolidation had to happen to stave off a crisis.

But it is absolutely no shock that down the road somebody has to pay the piper.

I love what you say.

Do you call the given day, whether it is bank of america or jpmorgan, for not laying out what the penalty is?

Is a markup of the cheap price it paid.

Why don't they just come out and say look, we paid $10 a share, and with these penalties, we paid $18 a share?

I don't see it as dismaying that eventually some of the misdeeds that took place in 20 04, 2005, 2006. where the banks will be my be liable for something later, we are going to come after you, they would not have bought those banks.

That is really interesting.

This is what i love about "surveillance." do we know what the penalty is going to be?

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


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