Banks internalize fines as tax-deductible expenses without admitting guilt

Evidence

Transgressing corporations shield their upper-echelon executives from accountability for their harmful practices and pay fines without having to admit wrongdoing. They receive taxpayer bailouts for financial losses and turn financial penalties into tax benefits by writing off fines as business expenses. They do so with the tacit consent of lawmakers who depend heavily on corporate funding of their political campaigns. This set of exonerations makes it easy to strip morality from harmful practices. With faulty corporate practices disconnected from adverse consequences for wrongdoers, the free-market system loses its corrective influence. — Albert Bandura, Moral Disengagement, 1608 (#corroborates, via linked claim)

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 (#complicates, via linked claim)

Categorization

• XREF: connects to: Deferred prosecution agreements let banks pay fines while no person faces charges — Albert Bandura, Moral Disengagement: How People Do Harm…, 1571; Corporate fines leave executives personally unpunished and tax-deductible; Fines written off as business expenses let corporations profit from wrongdoing — Albert Bandura, Moral Disengagement: How People Do Harm…, 1608 (+4 more)

Broader Connections

• Corporate fines leave executives personally unpunished and tax-deductible #corroborates (0.95)
• Fines written off as business expenses let corporations profit from wrongdoing #corroborates (0.92) — Albert Bandura, Moral Disengagement, 1608
• Bank executives reframed regulatory evasion and mass harm as mere innocent mistakes #complicates (0.75) — Albert Bandura, Moral Disengagement, 1593