Because Our Government Has Been Completely Captured by the Banksters

James Kwak asks, "Why Is Credit Suisse Still Allowed to Do Business in the United States?"

Thia has been another episode of simple answers to simple questions.

On a slightly less glib level, Kwak wonders why, if the financial markets are all better, and the banks insist that they are not to big to fail, why we cannot see fit to suspend the banking license of a foreign bank that has spent decades defrauding the American government.

The fundamental point is that if Credit Suisse really is solvent, then there are no losses that have to be absorbed by someone else (other financial institutions or taxpayers). If its assets really are worth more than its liabilities, then it must be possible to close down the bank without harming anyone else (except shareholders), given enough time. The whole point of capital regulation is to make sure that this can always be done. People would lose their jobs, but the whole premise of the financial sector is that it is providing useful services, which means that those jobs would be recreated elsewhere in the industry (except for the jobs based on tax fraud, which should go away for good).

Our finance system is not just corrupt, it is criminogenic.

We gotta figure out a way to shut this all down in an orderly manner, and replace it with something, you know, sane.