Bank executives reframed regulatory evasion and mass harm as mere innocent mistakes

Evidence

In his defense of the banking industry general counsel at Bank of America Gary Lynch criticized the regulatory efforts in the aftermath of the financial crisis (Norris, 2013). He dismissed the Volcker rule as meaningless and as forcing banks to second-guess regulators in trying to run their business. He cites the caustic criticism by the head of the Deutsche Bank of Wolfgang Schäuble, German finance minister, for suggesting the need for additional bank regulations, “banks still show great creativity in evading regulations,” (Ibid). Finding ways of circumventing regulations is a common corporate practice not an outlandish claim. However, the top banker discredited Schäuble as an “irresponsible” official resorting to “populist” rhetoric. As for bankers not going to jail, Lynch minimized the trading violations, “it is not a crime to make stupid mistakes” (Ibid). These “mistakes”, wreaked havoc with financial systems worldwide and devastated people’s lives. It does not serve the public interest to grant top executives immunity from the consequences of corporate wrongdoing. — Albert Bandura, Moral Disengagement, 1593

Categorization

• XREF: Connects to moral disengagement mechanisms (euphemistic language, displacement of blame) and to the general theme of corporate-impunity literature discussed elsewhere in this book. — connects to: Consumer-protection transparency rules fail because banks manipulate the very form of simplicity — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 350; Expert consensus reports codify what banks can get away with rather than genuine reform — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 539; Fraud defendants can sincerely recast self-interest as heroism against banks — Anna Merlan, Republic of Lies, 654