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November 22, 2013 - Harry Eagar
Ever since the Republicans crashed the stock market, they have desperately spun a story that shifts the cause away from Reaganomics. The story comes in versions from mild to wild but it boils down to: if it hadn't been for the Community Investment Act that required banks to make loans to deadbeats (brown deadbeats at that), it never would have happened.
From time to time, factoids are reported that demonstrate this cannot be so. Here is another.
"Europe’s biggest banks, led by Lloyds Banking Group Plc and Deutsche Bank AG, have racked up more than $77 billion in legal costs since the financial crisis, five times their combined profit last year.
"Since September 2008, the 18 banks with the highest litigation expenses paid at least $24.9 billion settling lawsuits and probes, set aside $31.5 billion to compensate U.K. clients improperly sold products including mortgage insurance and earmarked $20.9 billion for further penalties, data compiled by Bloomberg show. The sum equates to spending $42 million a day. The total may be higher as many settlements aren’t public."
The ACA did not operate in Europe but Reaganomics did, in various guises.
Bloomberg gives the comparable cost for US banks as $100 million. It does not say how much of the European banks' chicanery occurred in the US or how much of that was related to home mortgages, but some of it was.
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