How Many More Banking Scandals Will It Take To Make A Change?

Authored by Simon Black via,

This morning after my plane landed from Bangkok, I was having breakfast in the business lounge in Sydney and glanced at the local paper, The Australian.

The front-page headline told the story of yet another banking scandal:

“Cartel case nets six bankers”

The article was about how six prominent investment bankers in Australia colluded to defraud investors.

This comes the day after Australia’s financial regulator hit Commonwealth Bank with an AUD $700 million (~USD $525 million) fine for aiding criminal organizations to launder money.

And earlier this week the United States government slammed French bank Société Générale with a $1 billion fine for rigging interest rates and bribing Libyan government officials.

I’ll pause and acknowledge the obvious - banks are constantly screwing their consumers and violating the public trust.

That much is a given.

It’s been proven time and time again that banks lie, cheat, steal, and otherwise do whatever they have to do to make more money at our expense.

They manipulate markets. They make wild bets with their customers’ savings. They engage in accounting tricks to make themselves appear financially healthier than they really are.

And if that weren’t enough, the banks have the audacity to treat us, the customers, as if we’re the criminals.

Completely normal, innocent bank transactions are viewed with suspicion and heavily scrutinized.

And if you’re adventurous enough to test this point, try withdrawing a few thousand dollars of your own money in cash and see if you feel like a valued customer.

Even for banks that behave with a modicum of decency, there’s still the simple fact that an average deposit account pays a laughable, minuscule amount of interest.

JP Morgan, Bank of America, and Wells Fargo all currently offer rates between 0.01% and 0.04% for checking and savings accounts.

Sure, interest rates in general are obviously low. But they’re no longer zero– the Federal Reserve has been gradually raising rates over the last 2 ½ years. Even short-term Treasury Bills pay nearly 2% on an annual basis.

Yet despite these steady increases, the biggest banks haven’t budged on how much interest they pay to their depositors.

In light of all this, there’s literally no reason to leave the bulk of your savings in a bank, especially with so many alternatives for savings and lending, including short-term bonds, blockchain, and Peer-to-Peer loan websites.

Yet in some sort of bizarre financial Stockholm Syndrome, most people still keep the vast majority of their savings in the very same banks who have a history of defrauding them.

This is pretty strange behavior. These banks are stealing your money, whether directly (Wells Fargo) or indirectly (in the case of the interest rate mismatch).

It’s not like this is some closely-guarded secret either. It’s all over the news, and the banks have admitted their guilt.

So people who don’t make any financial changes are deliberately choosing their captors over common sense.


J S Bach MGTOW_MONERO_XMR Wed, 06/06/2018 - 21:26 Permalink

NOTHING will change until the people are made to suffer - HARD.  The impossible reparations and hyperinflation that hit Weimar Germany in the 20s is what set the table for a cleaning out of their financial, cultural and moral stables.  It will all happen again in the West sooner than we think... and THEN we'll see some change.

In reply to by MGTOW_MONERO_XMR

Folkvar sixsigma cygnu… Wed, 06/06/2018 - 22:05 Permalink

Where else is there to put your money? You can only buy so much gold and silver before it gets silly and you can only stuff so much money under the mattress so to speak. The writer recommends bonds, blockchain, and peer to peer loans. Bonds possibly, short term only, but the bond market isn't exactly safe in my view. Blockchain is pure speculation, hugely volatile. Peer to peer loans I wouldn't touch with a ten foot barge pole. The simple fact is there is little choice to put the bulk of your money other than in a bank and wherever you do put your money will end up in a bank anyway. The best place is hard assets like property but you have to buy outright in my view.

In reply to by sixsigma cygnu…

Al Gophilia Folkvar Wed, 06/06/2018 - 23:21 Permalink

It's the money, you stupid nongs. 

Section 115 of the Australian Constitution:


States not to coin money

                   A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.

What have they (our political representatives) done to us? They claim that we were the lucky country which gained its wealth of the back of the Merino wool clip. 


We were lucky because we had a money that grew in value from the cumulative effort we put into developing the nation. The more you create, the more that gold has to value, therefore the exchange rate of gold increases. 

With a printed legal tender currency, the more you print, the less the first one printed is worth. Inversely, with gold, the more that our labour creates, the more the gold is worth. Gold is the wealth building money of the worker, paper currencies are the wealth extactors from the worker to the banker.

Which would you prefer?


In reply to by Folkvar

Sabibaby MasterPo Wed, 06/06/2018 - 21:54 Permalink

It doesn't have anything to do with "CASHLESS" it's refusing to use fractional reserve banking and Federal Reserve Notes. If you want to trade Au/Ag coins trade coins, if you want to trade cryptocurrencies trade cryptocurrencies. Fuck use seashells and salt for all I care, just don't make people pay interest on "Federal Reserve" funny money!!!


In reply to by MasterPo

LetThemEatRand Wed, 06/06/2018 - 21:25 Permalink

I can't remember, did Facebook lose 10 customers or was it 12 when it was revealed that they are spying on all of their users and selling their data?   Hey Chauncey, check out that cool building over there.  It makes kind of scary noises but everyone else is going in there.  Let's go check it out.

NoDebt Wed, 06/06/2018 - 21:29 Permalink

We'll all be old and gray before you see an interest rate much above 0% on a typical "passbook" savings account, thanks to the Federal Reserve.  The banks have TRILLIONS of excess reserves on account with the Fed.  They DON'T NEED YOUR DEPOSIT MONEY.  The Fed has covered them for the next decade already, easily.

That being said, if you move from demand deposit vehicles (savings accounts) to time deposit vehicles (CDs) you can get something more like "prevailing" interest rates.  2.2% for 12 months up to about 3.2% for a 5 year CD, if you know where to look.  

I only know this because a client asked me to build them a CD "ladder" last month, so I did the research.  I don't normally build CD ladders, it's just not my wheel house, but that's what I found so I thought I'd pass it along.



Cabreado Wed, 06/06/2018 - 21:45 Permalink

"How Many More Banking Scandals Will It Take To Make A Change?"

Rhetorical question, eh?

The answer is that a functioning Congress is the only institution -- expertly and concisely designed -- that could shut down the Fed in a relative instant.

As an elected body... it is clearly the People who are failing.

That was The Design.

Get with the program, Simon... "banking scandals" are so last decade, as even an honorable mention.

Yen Cross Wed, 06/06/2018 - 22:09 Permalink

 It was ALWAYS about "dark Pools" Tyler

  Prop Desks & Dark Pools. 

  Take a deep breath, and welcome to the United States Treasury Department?  [compartment]

warsev Wed, 06/06/2018 - 22:12 Permalink

"How Many More Banking Scandals Will It Take To Make A Change?"

Well, just what "Change" do you propose? All changes come with increased regulation (=increased costs), more government bureaucracy, and a whole slew of unintended consequences.

Seriously. What changes do you propose???? Don't just restate the problem. Have a solution.

Yen Cross Wed, 06/06/2018 - 22:53 Permalink

 The "greatest generation" doesn't live of the family.

 Leaders always stand out !



  ]R   We Never asked for the job<

Victor von Doom Wed, 06/06/2018 - 23:00 Permalink

"How Many More Banking Scandals Will It Take To Make A Change?"

What, when the banks own the government and are only ever given token fines for something that would get you or I bankrupted and thrown in gaol for life? When the results of those fines have the impact of driving share prices higher?

Oh, I don't know, I'd say an infinite more amount of scandals should do the trick.


ConnectingTheDots Wed, 06/06/2018 - 23:47 Permalink

It never ceases to amaze me how people still keep lining up at the Wells Fargo branch in our town to give them their hard earned money, when there is a small community bank nearby.


Salmo trutta Wed, 06/06/2018 - 23:56 Permalink

"Even for banks that behave with a modicum of decency, there’s still the simple fact that an average deposit account pays a laughable, minuscule amount of interest."

Three blind mice. Three blind mice.  See how they run. See how they run!
Thank GOD almighty.  That's a good thing.  All bank-held savings are un-used and un-spent, lost to both consumption and investment.  How so?  DFIs always create new money whenever they lend/invest.  They do not loan out existing deposits saved or otherwise.
- Michel de Nostredame (the best market timer in history bar no one).


JailBanksters Thu, 06/07/2018 - 02:32 Permalink

When we say, Fraud is the Business Model of Banks, it's treated like a Joke that belongs on SNL.

But it's not a Joke, Fraud really is the Business Model of Banks.

Instead of taking Banks to court for Fraud, we should be putting the Banks Business Model on Trial.

ItsAllBollocks Thu, 06/07/2018 - 06:49 Permalink

... but but, they told me it's bitcoin that's aiding criminal organizations to launder money. No, no, this can't be right. Besides, it wouldn't be my bank doing dastardly things, my bank is the one you can trust. I know that's true because they said so on TV and if it's on TV, well it must be right...