Nomi Prins pens this powerful piece on why #AB857 and public banks can help curb abusive big banks. As a former Goldman Sachs executive, she has witnessed Wall Street’s recklessness firsthand and understands why it’s important to enable localities to create public banks to use local funds for public good, not private profit.
By Nomi Prins, Truthout. For far too long, Wall Street has wreaked havoc on people’s personal financial stability and our economy as a whole. I should know. As a managing director at Goldman Sachs in the early 2000s, I witnessed firsthand how the banking industry lined their pockets at the expense of customers.
Not much has changed since then. After the mortgage fraud crisis of 2007-08, the biggest banks were slapped with $216 billion in fines – a drop in the bucket for firms that raked in a cool $237 billion last year alone. Infamously, not a single banker went to jail. Today, Wall Street banks continue to commit fraud, enjoy front-row lobbying seats in Washington, write legislation on their own behalf, and maintain easy access to credit courtesy of the Federal Reserve.
The Dodd-Frank Act of 2010 placed some regulations on banks’ riskier bets. But, crucially, that reform failed to divide banks into two entities: one dealing with people’s FDIC insured deposits, and the other able to create complex securities and engage in derivatives trading using our deposits as collateral. Ten years after the financial crisis, our money is still very much at risk of being gambled away.
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