Former Federal Reserve Board Chairman Ben Bernanke has released a book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, which is about his experiences at the center of the financial crisis in 2008 and 2009. In a broadcast interview regarding the book, Bernanke responded to the question, “Should somebody have gone to jail?” [regarding responsibility for the crisis] by saying unequivocally, “Yes, I think so.”
Bernanke went on to explain that the efforts of the Department of Justice have been to indict or threaten to indict financial firms. He noted that a "financial firm" can't be put in jail. Bernanke continued, “It would have been my preference to have more investigations of individual actions as obviously everything that went wrong or was illegal was done by some individual not by an abstract firm; and so in that respect there should have been more accountability at the individual level.”
This admission by the former Fed Chairman confirms the long held belief by CBAI and community bankers that the fundamental American constitutional right of ‘equal justice under the law’ is not applicable when it comes to the too-big-to-fail (TBTF) banks and financial firms. The United States apparently has a two-tiered system of justice – one for them and another for everyone else. While this confirming admission by the former Fed Chairman is gratifying, the problem of TBTF has not been solved and remains an enormous threat to our financial system, the economy, and American taxpayers and it must be addressed. The community bank position on TBTF is the right one – these financial behemoths have repeatedly proven they are too-big-to-manage, too-big-to-regulate, too-big-to-behave, too-big-to-prosecute, too-big-to- jail, and must be downsized. CBAI urges the current Fed Chair, Janet Yellen, her fellow banking regulators, and the Department of Justice to take greater leadership positions than have been taken in the past in assuring that equal justice is a truly a reality for all.