Yves Smith — So Why is the Administration Trying to Look a Smidge More Aggressive About Going After Banks?

In the last few days, the Department of Justice (as well as the SEC) filed a case against Bank of America over a 2008 prime mortgage securitization that takes breaks some new ground in fraud allegations and is also saber-rattling in the form of launching a criminal investigation into JP Morgan’s sale of mortgage backed securities.

So what’s with the new-found religion? The Snowden effect? Perhaps, but given that cases take a while to gin up, this may be Holder trying to rebuild what little he has left in the way of a reputation after confirming remarks made by others in his office that some animals, um, banks, were more equal than others. [allusion to George Orwell's Animal Farm]....

It’s inconceivable that the DoJ would indict JP Morgan at a corporate level. Not only would Holder not risk destabilizing the bank, there’s simply no way the Treasury would let him go there. If any actual criminal charges are contemplated (remember, this is just an investigation), expect a rerun of the UBS Libor strategy, where UBS paid a large fine for Libor rigging and admitted to criminal conduct…in its Japanese unit. I’d be delighted to be proven wrong, but there’s no reason to expect anything other than new and better optics from the Obama Administration at this late date.

Naked Capitalism
So Why is the Administration Trying to Look a Smidge More Aggressive About Going After Banks?
Yves Smith