No senior Wall Street executives were imprisoned for actions that contributed to the global financial crisis. The few criminal prosecutions for management were reserved for executives at small and regional financial firms. This stands in stark contrast to the approximately 1,000 executives jailed after the 1989 savings and loan crisis. It also runs counter to public support for criminal accountability post-crisis as well as the general trend toward criminal social control in the United States. Likewise, few firms faced criminal prosecution. Instead, the primary punishment resulted from civil penalties leveled against individuals and firms, with most of the largest banks paying billions in fines to regulatory agencies and in restitution to victims. Now that the five- or ten-year statute of limitations for the criminal fraud statutes most relevant to questionable pre-crisis behavior has passed, and the political salience and public outcry over financial misdeeds has subsided, the window of opportunity for criminal accountability is closed. Still, the lack of accountability raises important questions for financial regulation, the state of prosecution for white-collar crime, the nature of financial industry influence over politics, and the broader health of US democracy. What role did Wall Street, and the broader financial services industry, play in bringing about the crisis? What behaviors, if any, crossed the line from legitimate business activity intro criminal behavior? Is that distinction easily drawn? And if actors did behave criminally, why did state and/or federal prosecutors not pursue criminal charges more aggressively? What can be learned from countries that used criminal prosecutions more successfully? Even if criminal behavior occurred, is strong prosecution the appropriate remedy to deter future crime and prevent another financial crisis? There is substantial agreement that financial industry behavior contributed to, and amplified the severity of, the crisis. There is, however, much less agreement about whether white-collar crime occurred; if it did, why it went unpunished; and whether criminal punishment is the proper response on moral or practical grounds. The historical and political context for how white-collar crime was (re)framed, how this framing contributed to the deregulation of the financial industry, and the rise of its political power explain how the Wall Street’s behavior was understood, rationalized, and left largely unpunished.
The Impact of Post-Crisis Regulatory Reforms on Cross-Border Financial
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