CNN approached us about writing an op-ed on the $8.9 billion BNP Paribas settlement and you can see the article here. This is the first time we’ve written for them and they seemed happy with the outcome. It was a very constrained space, only 600 words, which is enough only to make a point or two. Unfortunately, as often happens, the headline took a position I didn’t take in the article. Oh well.
I’ve been remiss in not making an observation about the settlement. There’s been a lot of handwringing about how fair the BNP Paribas settlement was, given that it was a dollar-for-dollar punishment, while other banks got off paying far less relative to their volume of money laundering. It’s not easy to make such simple comparisons. Each case has its own fact set, and prosecutors maintain that BNP Paribas’ conduct was the worst for several reasons: continuing to engage in prohibited activities for years after being warned, obstructing the investigation, and knowledge of and involvement in the misconduct at the very top levels of the bank.
The real bone of contention should be to compare the BNP Paribas settlement with bank pacts for other types of misconduct. That point has been made by foreign critics of the deal, in their objections to how large the fine is for defying US foreign policy. But there has been perilous little in the way of complaints by domestic activists, that these deals show how much the government was in bed with the banks when the various mortgage settlements were undertaken. You can be certain that the idea of “dollar for dollar” fines or demanding that senior officers lose their jobs never occurred to any of the regulators involved.
Nevertheless, now that these precedents have been set, it ought to be harder for the officialdom to let banks off as easy as they have in the past….provided that groups that represent the public interest make noise about it and can get the media to take the issue up.