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Total US bank crisis related fines exceed $330 billion: Are banks all bad?

Anthony Carfang’s, Managing Director at Treasury Strategies, excellent article “Aug, 2018 - US Department of Justice Commemorates 10th Anniversary of the Financial Crisis with More Bank Fines” on LinkedIn charts the latest fines made by the US Department of Justice:

  • Wells Fargo paying a $2.1 billion fine for misstating income information on subprime mortgages in its mortgage-backed securities packages
  • HSBC reached an agreement in principle with DOJ to pay federal regulators $765 million penalty arising out of HSBCs mortgage origination and securitization dating from 2005 - 2007. It will also pay $26.8 million to the Commonwealth of Massachusetts, also for mortgage claims
  • RBS paid $4.9 billion in mortgage related fines to U.S. Regulators which raises RBS penalties for crises-era activities to $27 billion.

And the total bank crisis related fines in the US exceed $330 billion - see the time line in Carfang’s article of all the heinous criminal acts that have been fined, but few of the perpetrators have been incarcerated.

Banks are not good at helping SMEs in UK

The latest research release from Fraedom - the commercial payment card programme supplier - revealed that 45 per cent of UK SMEs believe that banks have a poor understanding of their business needs, according to a study of 1,000 business owners and decision makers across a range of small to medium-sized organisation. In addition to this, 24% of UK SMEs highlighted that banks fail to prioritise SME needs.

Banks do good stuff too

A small, but classic example of what good stuff banks do. comes from Wells Fargo - a major payer of US Department of Justice fines. Dave Trotter and his corporate treasury team publish “Inside Treasury Insights” newsletter which always has one or two nuggets of understanding. The August 2018 newsletter has items on:

  • SOFR takes first steps to replace LIBOR
  • How will tax reform affect your cash flow and strategic plans?
  • The stakes in midterm congressional elections: Experts explore how November’s midterm elections could impact Congress — and your business.

A much bigger and globally important (and admirable) example is how BNP Paribas has developed an environmental, social and governance policy for nine sectors - see - which is very strong and will have an impact world-wide, e.g. in Coal-Fired Power Generation “BNP Paribas will not provide financial products and services to CFPP projects, regardless of their location.” Banks are much more powerful here than despots like Trump. The courage to have such a policy is important to mankind.

Are banks essential?

Absolutely, particularly if they have the ESG policies that BNP Paribas have developed combined with the latest cash and treasury management systems and services. They’ll lose business to fintechs, but who else can we really trust? Not Facebook, Google, Apple, Amazon, etc.


CTMfile take: Banks are probably one of the biggest hopes for our survival in the race to stop the world overheating, if they can develop such ESG policies across all banks. Not working parties though, just action.


This item appears in the following sections:
Sustainable Green Treasury
Green Corporate Treasury Department
Sustainable Business Models
Sustainable Cash and Liquidity Management
Sustainable Funding
Sustainable Investing

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