The Routledge International Handbook of the Crimes of the Powerful by The Routledge International Handbook of the Crimes of the Powerful (2015)

Author:The Routledge International Handbook of the Crimes of the Powerful (2015)
Language: eng
Format: epub
ISBN: 9781317807308
Publisher: Taylor & Francis Ltd

Criminogenic banks

To date, relatively few bankers have faced criminal charges, making it difficult to determine how many bank failures during the recent crisis were caused by criminal fraud. However, we can get a sense of how they were able to exploit economic conditions and loopholes in regulations to loot their institutions from professional liability lawsuits filed by the FDIC. These suits consist of accusations of professional misconduct against officers, directors, and others at failed institutions.3 The goal of these suits is often to recover monies from directors’ and officers’ insurance policies. By the end of 2013, the FDIC had filed a total of 71 professional liability suits against commercial banks, their officers, and directors. Important information may also be found in audits conducted by the FDIC’s Office of the Inspector General that review the causes of failure at closed banks. Additional information on most of the characteristics of these institutions is available from Uniform Bank Performance Reports (UBPRs). A profile of the failed banks at which professional liability suits had been filed is presented in Table 18.1 along with data for comparison groups, defined in the UBPR database in terms of asset size.

Table 18.1 Characteristics of failed/sued banks and comparison group banks

Failed/sued banks Comparison group

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