Banks have played down the implications of this
month’s announcement that Goldman Sachs is
undergoing criminal investigation by the Department of Justice
(DoJ) for misleading customers over mortgage backed securities
(MBS) sold during the financial crisis.
But experts predict criminal prosecutions against
banks are not far away.
The allegations are the most serious against a
leading bank’s selling practices during the
crisis. A US bankers’ counsel said the
investigation could lead to greater scrutiny of Chinese walls,
but that this would have been the case irrespective of the bank
under DoJ review.
"Banks are constantly engaged in policy review," he said.
"Anytime a regulator takes action against any bank, people
review procedures in place." There’s a balance to