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Some banks have become too big to prosecute, attorney general says

March 07, 2013|By Shan Li
  • Atty. Gen. Eric H. Holder Jr. responds to a question during a Senate Judiciary Committee hearing.
Atty. Gen. Eric H. Holder Jr. responds to a question during a Senate Judiciary… (Michael Reynolds / EPA )

First, financial institutions were too big to fail. Now, are they too big to prosecute?

Atty. Gen. Eric H. Holder Jr. said Wednesday that some banks had become so big that prosecuting them could endanger the wider economy.

In remarks before the Senate Judiciary Committee, Holder suggested that prior attempts at going after major banks and other financial institutions were hampered by their size, which has an "inhibiting influence on our ability to bring resolutions," reported the Hill, a newspaper covering Congress.

"I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy," he said. "I think that is a function of the fact that some of these institutions have become too large."

Holder's comments come months after the U.S. government declined to prosecute and instead settled with British banking giant HSBC in connection with accusations of money-laundering; reports at the time indicated that federal officials were nervous about potentially causing waves in the financial markets.

The federal government has been criticized for lacking zeal in pursuing criminal charges against individuals who played a part in causing the financial crisis.

Federal officials have tended to go the civil litigation route, most recently suing Standard & Poor's Corp., accusing the credit rating agency of misleading investors with false ratings on bonds that were backed by bad subprime mortgages.

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Follow Shan Li on Twitter @ShanLi

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