Wall St / BANKs

previously orphan node, see financial node and bank tag

no merri

see also FIRE sector

SEE GENTRIFICATION

SEE FINANCIALIZATION

SEE BANKSTERS

see divest ESG

tag zombied? bank bnk mebbe pink 1%

bak 1019

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heated gmail 9 26

some blame where it’s due.

Fossil fuel companies, obviously. (Truly, no clue how those executives sleep at night.) And I gave you my two cents on big ag.

Also:

Big banks: Since the Paris Agreement was signed in 2015, 60 banks have provided $7.9 trillion in financing to fossil fuel companies, with the top four banks alone—JPMorgan Chase, Citi, Wells Fargo, and Bank of America—providing more than $1.64 trillion.

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an 11 24common dr

Consumer advocates applauded last month as the Consumer Financial Protection Bureau finalized a rule aimed at making it easier for people to switch financial institutions if they're unhappy with a bank's service, without the bank retaining their personal data—but on Thursday, more than a dozen groups warned the CFPB that major Wall Street firms are trying to stop Americans from benefiting from the rule.

Several advocacy groups, led by the Demand Progress Education Fund, wrote to CFPB director Rohit Chopra warning that major banks—including JP Morgan Chase, Bank of America, Citi, TD Bank, and Wells Fargo—sit on the board of the Financial Data Exchange (FDX), which has applied to the bureau for standard-setting body (SSB) status, which would give it authority over what is commonly known as the "open banking rule."

Standard-setting authority for the banks would present a major conflict of interest, said the groups.

The banks are also on the board of the Bank Policy Institute, which promptly filed what the consumer advocates called a "frivolous lawsuit" to block the open banking rule when it was introduced last month, claiming it will keep banks from protecting customer data.

At a panel discussion this week, Bank of America CEO Brian Moynihan also said the open banking rule, by requiring financial firms to unlock a consumer's financial data and transfer it to another provider for free, would cause "chaos" and amplify concerns over fraud.

The groups wrote on Thursday that big banks want to continue to "maintain their dominance by making it unduly difficult for consumers to switch institutions."

"The presence of these organizations on both the FDX and BPI boards undermines the credibility of FDX and presents various concerns relating to conflict of interest, interlocking directorate, and antitrust law," they wrote.

Upon introducing the finalized rule last month, Chopra said the action would "give people more power to get better rates and service on bank accounts, credit cards, and more" and help those who are "stuck in financial products with lousy rates and service."

The coalition of consumer advocacy groups—including Public Citizen, the American Economic Liberties Project, and Americans for Financial Reform—urged Chopra to reject FDX's application for standard-setting authority so long as the banks remain on its board.

“It would be a flagrant conflict of interest for the same banks who are suing to block the open banking rule because it threatens their market dominance to also be in charge of implementing it," said Demand Progress Education Fund corporate power director Emily Peterson-Cassin. "The American people are fed up with Wall Street controlling every aspect of their lives and the open banking rule is an opportunity to give all of us some financial freedom. The CFPB must stop this ploy by the biggest banks to keep us trapped under their thumbs."

The groups called the open banking rule "a historic step forward for the cause of giving consumers true freedom intheir financial lives."

"For this reason, it is imperative that SSB status not be granted to an organization whose board members are, either directly or through a trade association they are participating in, suing the CFPB to stop the rules from taking effect, particularly when such members may be ethically conflicted from such dual participation," said the groups. "By rejecting SSB status for FDX or any other organization with similar conflicts of interest pertaining to Section 1033, the CFPB will help prevent big banks from sabotaging open banking rules."

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1 24 an robt reich

when I was a boy, my father sold dresses and blouses to the wives of factory workers. As the wages of those workers rose through the 1950s, my father earned enough to expand his business to a second shop in another factory town not far away. We were by no means rich, but he earned enough to put us in the middle class.

For three decades after World War II, the average hourly compensation of American workers rose in lockstep with the nation’s productivity gains. In other words, as workers produced more value, they got more pay.

It was a virtuous cycle, from which our family and tens of millions of others benefited: The economy grew, and the middle class expanded. Its purchasing power rose, causing the economy to grow faster. This fueled new investments and innovations that further enriched and enlarged the middle class.

But then, beginning in the late 1970s, the virtuous cycle came to a halt.

While productivity gains continued much as before and the economy continued to grow, wages began to flatten. Starting in the early 1980s, the median household’s income stopped growing altogether, when adjusted for inflation.

Today, the median household is earning just a bit more than it did in 1979, 45 years ago (adjusted for inflation).

If you’re a non-supervisory worker who relies on an hourly wage — still the vast majority of workers — you’re earning no more than you earned in 1969. Job security also declined.

So, despite an economy that’s far larger and more productive than it was 40 or 50 years ago, the typical American worker has gone nowhere.

The standard explanation attributes this to neutral “market forces,” especially globalization and technological innovations that have made many working Americans less competitive.

While surely important, the standard explanation can’t account for much of what’s happened. It doesn’t explain why the transformation occurred so suddenly, over a relatively small number of years. Nor why other advanced economies facing similar forces didn’t succumb to them. Nor why so much of the nation’s income and wealth have gone to the top.

America’s middle class has shrunk because of its declining bargaining power — orchestrated and directed by America’s oligarchy. The economic gains that would otherwise have gone to the middle class went instead to the moneyed interests at the top. Let me explain.

1. The financialization of the economy

Before the 1980s (as I noted in our discussion about the decline of the common good), large corporations were in effect owned by all their stakeholders, who were assumed to have legitimate claims on them.

As early as 1914, the popular columnist and public philosopher Walter Lippmann called on America’s corporate executives to be stewards of America. “The men connected with [the large corporation] cannot escape the fact that they are expected to act increasingly like public officials …. Big businessmen who are at all intelligent recognize this. They are talking more and more about their ‘responsibilities,’ and their ‘stewardship.’”

This vision of corporate governance came to be widely accepted by the end of World War II. Frank Abrams, chairman of Standard Oil of New Jersey, declared in a 1951 address that typified what other chief executives were saying at the time:

*“The job of management is to maintain an equitable and working balance among the claims of the various directly affected interest groups … stockholders, employees, customers, and the public at large. Business managers are gaining professional status partly because they see in their work the basic responsibilities [to the public] that other professional men have long recognized as theirs.”

Pulp and paper executive J.D. Zellerbach told Timemagazine that “[t]he majority of Americans support private enterprise, not as a God-given right but as the best practical means of conducting business in a free society … . They regard business management as a stewardship, and they expect it to operate the economy as a public trust for the benefit of all the people.”

But a radically different vision of corporate ownership emerged in the late 1970s and early 1980s. It came from corporate “raiders” who mounted hostile takeovers with high-yield junk bonds.

The raiders used leveraged buyouts and undertook proxy fights against the “industrial statesmen” who, in their view, were depriving shareholders of the wealth that properly belonged to them.

The raiders assumed shareholders were the only legitimate owners of the corporation and that the only valid purpose of the corporation was to maximize shareholder returns.

This transformation did not happen by accident. It was a product of changes in laws governing corporations and of financial markets — changes that were promoted by the monied interests, America’s oligarchs.

In 1974, at the urging of pension funds, insurance companies, and Wall Street, Congress enacted the Employee Retirement Income Security Act. Before then, the giant portfolios of pension funds and insurance companies could be invested in only high-grade corporate and government bonds. Legally, it was their fiduciary obligation.

The 1974 Act changed that, allowing pension funds and insurance companies to invest in the stock market — thereby making a huge pool of capital available to Wall Street.

In 1982, another large pool of capital became available when Congress allowed savings and loan banks — the bedrocks of local home mortgage markets — to invest their deposits in a wide range of financial products, including junk bonds and other risky ventures promising high returns.

The convenient fact that the government insured savings and loan deposits against losses made these investments all the more tempting (and ultimately cost taxpayers some $124 billion when many of the banks went bust).

Meanwhile, the Reagan administration loosened other banking and financial regulations and simultaneously cut the enforcement staff at the Securities and Exchange Commission.

All this made it possible for corporate raiders to get the capital and the regulatory approvals they needed to mount unfriendly takeovers.

During the whole of the 1970s, there had been only 13 hostile takeovers LBO of companies valued at $1 billion or more. During the 1980s, there were 150.

Even where raids did not occur, CEOs felt pressured to maximize shareholder returns for fear their firms might otherwise be targeted. Hence, they began to see their primary role as driving up share prices.

The easiest and most direct way for CEOs to accomplish this feat was to cut costs — especially payrolls, which constitute most firms’ largest single expense.

Accordingly, the corporate statesmen of the 1950s and 1960s were replaced by the corporate butchers of the 1980s and 1990s, whose nearly exclusive focus was to “cut out the fat” and “cut to the bone.”

When Jack Welch took the helm of GE in 1981, the company was valued by the stock market at less than $14 billion. When he retired in 2001, it was worth about $400 billion. Welch accomplished this largely by cutting payrolls.

Before his tenure, most GE employees had spent their entire careers with the company. But between 1981 and 1985, a quarter of them — 100,000 in all — lost their jobs, earning Welsh the moniker “neutron Jack.” Even when times were good, Welch encouraged his senior managers to replace 10 percent of their subordinates every year in order to keep GE competitive.

Other CEOs tried to outdo even Welch. As CEO of Scott Paper, “Chainsaw” Al Dunlap laid off 11,000 workers, including 71 percent of headquarters staff. Wall Street was impressed, and the company’s stock soared.

When Dunlap moved to Sunbeam in 1997, he promptly laid off half of Sunbeam’s 12,000 employees. (Unfortunately for Chainsaw Al, he was caught cooking Sunbeam’s books; the SEC sued him for fraud, and he settled for $500,000, agreeing never again to serve as an officer or director of any publicly held company.)

In consequence of this change in the purpose of the American corporation, share prices soared, as did the compensation packages of CEOs. The results have been touted as “efficient” because resources theoretically have been shifted to “higher and better uses.”

But the human costs of this transformation have been huge. Millions of workers have lost jobs and wages. Many communities have been abandoned.

Nor have the efficiency benefits been widely shared.

As corporations have steadily weakened their workers’ bargaining power, the link between productivity and workers’ income has been severed.

Almost all the gains from growth have gone to the top. As noted, the average worker today is no better off than his or her equivalent 40 years ago, adjusted for inflation. Most are less economically secure.

Not incidentally, few own any shares of stock.

The richest 1 percent of Americans now own 52 percent of all the shares of stock owned by Americans. The richest 10 percent, 93 percent. The nation’s economic gains, once distributed broadly to the working and middle class — have been siphoned to the top.

2. Globaloney

Wages have also been suppressed because workers who are worried about keeping their jobs have accepted lower pay, relative to the economy’s productivity gains, than they did 40 years ago.

Here again, political decisions steered by the nation’s oligarchy have played a significant role. Some of the prevailing job insecurity is the result of trade agreements that invited American companies to outsource jobs abroad.

The conventional view equating “free trade” with the “free market” — in contrast to government “protectionism” — is wrong.

Just as all nations’ markets reflect political decisions about how they should be organized, so-called “free trade” agreements entail complex negotiations about how different market systems are integrated.

Within these negotiations, the interests of large corporations and Wall Street, to fully protect the value of their intellectual property and financial assets, have repeatedly trumped the interests of average working Americans to protect the value of their labor.

3. The Fed and inflation

When the Federal Reserve raises interest rates and Congress opts for austerity to reduce federal budget deficits — two policies favored by the oligarchy — the resulting unemployment also undermines the bargaining power of average workers.

Higher unemployment keeps wages low. This means higher corporate profits, leading to higher returns for shareholders.

The high inflation after the pandemic was driven in part by supply shortages and a major government stimulus. But it was also driven by monopolistic corporations using the excuse of inflation to raise their prices.

The Fed, however, believed that a root cause of inflation was wage growth, and it set out to slow the economy and loosen the labor market by raising interest rates. Here, too, the strategy was consistent with the views of the moneyed interests and was pushed by them.

4. The risk-shift to workers

Public policies that emerged during the New Deal and World War II placed most of the risks of economic change on large corporations rather than workers — through Social Security, worker’s compensation, 40-hour workweeks with time-and-a-half for overtime, and employer-provided health benefits (wartime price controls encouraged such tax-free benefits as substitutes for wage increases).

By the 1950s and 1960s, a majority of the employees of large companies remained with the companies for life. Their paychecks rose steadily with seniority, productivity, the cost of living, and corporate profits. When they retired, they received generous corporate pensions.

But after the junk-bond and takeover mania of the 1980s, that relationship broke down.

Even full-time workers who have put in decades with a company can now find themselves without a job overnight — with no severance pay, no help finding another job, no health insurance, and little or no pension.

Nearly one out of every five working Americans is now in a part-time job. Many are temporary workers, freelancers, independent contractors, or consultants, whose incomes and work schedules vary from week to week or even day to day. Two-thirds of American workers are living paycheck to paycheck.

The risk of getting old without a pension is rising.

In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed them a fixed amount of money every month after they retired.

Now, fewer than 10 percent of companies provide their workers defined-benefit pensions. Instead, they offer “defined contribution” plans whose risks have been shifted to the workers. When the stock market tanks, as it did in 2008 and then again in 2020, their 401(k) plans tank along with it.

A quarter of all workers with so-called “matching” defined-benefit plans get no match because they don’t earn enough to contribute to them.

Meanwhile, the risk of a sudden loss of income continues to rise. Even before the crash of 2008, the Panel Study of Income Dynamics at the University of Michigan found that over any given two-yearstretch, about halfof all families experienced some decline in income.

Those downturns have become progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.

Workers who are economically insecure are not in a position to demand higher wages. They are driven more by fear than by opportunity.

This is another central reality of American capitalism as organized by those with the political power to make it so.

5. The demise of labor unions

Fifty years ago, when General Motors was the largest employer in America, the typical GM worker earned $35 an hour in today’s dollars.

Today, America’s largest employer is Walmart, and the typical entry-level Walmart worker earns about $11 an hour.

This doesn’t mean the typical GM employee a half-century ago was “worth” four times what the typical Walmart employee today is worth. The GM worker was not better educated or motivated than today’s Walmart worker.

The real difference is that GM workers a half-century ago had a strong union behind them that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members.

Because more than a third of workers across America then belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they would be unionized if they did not come close to matching the union contracts.

Today’s Walmart workers do not have a union to negotiate a better deal. They are on their own. Because only 6 percent of today’s private-sector workers are unionized, most employers across America have no incentive to match union contracts. This puts unionizedfirms at a competitive disadvantage.

The result has been a race to the bottom.

Some argue that the decline of American unions is simply the result of “market forces.” But other nations have been subject to many of the same “market forces” and continue to have strong unions. In Sweden, 90 percent of workers in the private sector are unionized. These unions continue to provide their middle classes sufficient bargaining power to command a significant share of economic growth — a much larger share than that received by the middle class in the United States.

Why the difference? Look to politics and the allocation of power.

***

The National Labor Relations Act of 1935 guaranteed American workers the right to organize into unions and imposed on employers the legal responsibility to bargain with them.

As unions gained economic power in the late 1930s and 1940s, they gained greater. political power and wielded it to further enlarge the bargaining clout of American workers. After the legendary Treaty of Detroit in 1950, when Big Business and Big Labor agreed to share productivity gains in exchange for labor peace, the rate of unionization increased dramatically, as did wages and benefits.

Which is why, by the mid-1950s, almost a third of all American employees in the private sector of the economy belonged to a union, and why the median wage increased in tandem with productivity growth.

But starting in the late 1970s, the process went into reverse. Union membership began to decline, as did the economic and political power of unions, along with the bargaining clout of most workers.

The reasons for the decline involved the changes I’ve already noted — globalization, labor-replacing technologies, and a shift in the purpose of the corporation to maximizing shareholder returns.

But the decline of labor unions was also the consequence of political and legal decisions demanded by the monied interests.

When the Taft-Hartley Act of 1947 allowed states to enact “right-to-work” laws, workers who did not pay dues got a free ride off of those who did, thereby undermining the incentive for anyone to join a union in the first place.

Until the 1980s, such laws had minimal effect because they were enacted in southern and western states. Most industries remained in the north.

But as corporations came under increasing pressure to show high returns and cut labor costs, many CEOs found “right-to-work” states more alluring. Even the old heartland industrial states of Indiana and Michigan have enacted “right-to-work” laws.

CEOs whose corporations had high percentages of unionized workers moved, or threatened to move, to “right-to-work” states.

Additionally, Reagan’s notorious firing of the nation’s air traffic controllers for going on strike (which he had a right to do because they had no right to strike) signaled to the nation’s large employers that America had embarked on a different era of labor relations.

Workers who inhabited the local service economy — retail, restaurants, custodial, hotels, elder and child care, hospitals, transportation — faced a different challenge. Their jobs were in less danger of disappearing, because they couldn’t be outsourced abroad and most would not be automated. In fact, the number of local service jobs in America has continued to grow.

But because so many workers expelled from the older industrialized economy had no choice but to seek local service jobs, service-sector employers easily found people willing to work for low wages, few benefits, and little chance of advancement.

Walmart and major fast-food chains, such as Starbucks, have been aggressively anti-union. They’ve blocked union votes, fired workers who tried to organize, refused to enter into contract negotiations, and intimidated others into rejecting the union — all in violation of the National Labor Relations Act.

A succession of Democratic presidents have promised legislation streamlining the process for forming unions and increasing penalties on employers who violate the law, but nothing has come of these promises. (President Biden has been the first to strengthen the National Labor Relations Board and encourage it to enforce the law.)

The result of all this has been a steady decline in the percentage of private-sector workers who are unionized. Despite the jolt of labor activism in 2023, that percentage continues to drop.

The decline parallels the declining share of total income going to the middle class.

Take a look:

6. Summary

The underlying problem is that average working Americans have steadily lost the bargaining power to receive as large a portion of the economy’s gains as they received in the first three decades after World War II. As a result, instead of the middle class growing, it has shrunk.

To attribute this to the impersonal workings of the “free market” is to ignore how the market has been reorganized since the 1980s. America’s oligarchs — the moneyed interests — have spearheaded this reorganization in order to receive a steadily larger share of the nation’s economic gains. As those gains have risen, so has the oligarchy’s power to accumulate even more.

But it doesn’t have to be this way. Next week we’ll look at whether — and how — countervailingpower can be restored so that more of America’s poor and working class can ascend into the middle class once again.

*Robert Reich is a professor at Berkeley and was secretary of labor under Bill Clinton. You can find his writing at https://robertreich.substack.com/.*

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an 11 23

In the years since the Great Recession, when housing prices dramatically fell, Wall Street investors have been buying large numbers of single-family homes to use as rentals. As of 2022, big investment firms owned nearly 600,000 such properties nationwide.

Critics say this practice drives up home prices and worsens the housing shortage, making it harder for families to afford to buy. Industry advocates dismiss such charges, arguing that large investment firms own a tiny fraction of single-family rental housing across the U.S. – less than 4% of the total.

As a professor of public policy at Georgia Tech, I wanted to understand how this trend was affecting my neighbors. So I analyzed more than 1 million property sales in the Atlanta metropolitan area from 2007 to 2016. Since the study period included the mortgage crisis, I excluded bulk sales, such as the packages of foreclosed homes, that aren’t available to typical homebuyers. I examined only arm’s-length transactions of single-family detached homes, where buyers and sellers act independently.

I found that global investment firms buying up local properties are indeed hurting Atlanta families – specifically, Black ones.

Neighborhood transformations

In the period I studied, homeownership declined across the Atlanta metro area by more than 5 percentage points, similar to a nationwide trend. For an average neighborhood, home purchasing by large corporate investors explained one-quarter of that decline.

But when I broke the analysis down by race, I found that Black families were hit much harder: Large investment firms buying up local properties explained fully three-quarters of the decline in African American homeownership. In contrast, non-Hispanic whites were largely unaffected.

It turns out that while Wall Street firms control just a sliver of the single-family rental market nationally, they can have much more influence at the local level. In the Atlanta metro area, these firms own nearly one-third of all single-family rental properties. They’re even more concentrated in predominantly Black neighborhoods, where more than 10 houses in a row can be owned by the same corporation.

In my study, I found that large investors tend to snap up housing in majority-nonwhite, lower-income suburban neighborhoods. This makes homebuying even more challenging for middle-class families of color, as they get pushed out of the bidding market by global investors.

Home is where the financial security is

Homeownership has long been one of the main pathways for the American middle class to accumulate wealth. Despite this, the national homeownership rate declined by 5.5 percentage points between 2007 and 2016, reaching a five-decade low of 62.9%. Although homeownership has rebounded somewhat since 2016, it remains below pre-2008 levels.

And who owns these homes is starkly divided by race. Between 2015 and 2019, more than 70% of white families owned a home, compared with just 41% of Black families, according to an analysis by Harvard University’s Joint Center for Housing Studies.

To be sure, policies like racial covenants, discriminatory mortgage lending practices and redlining fueled low homeownership rates for Black Americans long before the Great Recession. But global investors’ growing control of single-family homes only widens existing racial gaps in homeownership and wealth.

Directions for new research

While my study focused on Atlanta, it’s not the only place where residents are competing with global investors for housing. Investment firms’ single-family rental portfolios are largely concentrated in Sun Belt metro areas, including Phoenix, Charlotte and Jacksonville. It wouldn’t be surprising to see similar conflicts playing out in those cities.

Since my analysis stopped in 2016, I can’t be sure that Black Atlanta residents are still affected by Wall Street firms buying up housing. Many investment firms have recently been switching from a buy-to-rent business model to a build-to-rent model, which could complicate matters.

In the meantime, while residents and policymakers have claimed that large corporations don’t invest in local communities, researchers lack robust evidence this is the case. Academics should study whether properties owned by institutional landlords are more likely to be poorly maintained or have code violations, as anecdotal evidence suggests.

It’s also worth investigating whether big investment firms undermine local revenue collection by serially filing property tax appeals.

An open-source tool for housing policy research

It’s been hard for researchers to identify corporate-owned, single-family homes, since it requires proprietary real-estate data and labor-intensive number crunching. In a separate project, my colleagues and I have developed a simple, user-friendly methodology that gets around such challenges with the use of open-source software and public tax parcel data.

Local governments and nonprofits can use our methodology to unveil all the corporate-owned residential properties in any neighborhood and link them to outcomes such as code violations. Using data-driven approaches like this is an important step toward developing policy solutions.

Brian Y. An, Director of Master of Science in Public Policy Program & Assistant Professor of Public Policy, Georgia Institute of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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an 7 23

no lnx

How Wall Street underwriting quietly funnels billions into fossil fuels: analysis

Kenny Stanciland Common Dreams July 25, 2023

A report out Monday sheds light on how big U.S. banks' underwriting of bonds and equities for polluting corporations constitutes a "hidden pipeline" for fossil fuel financing.

It's no secret that financial institutions play a leading role in driving the climate emergency. Since 2016, the year the Paris agreement took effect, the world's 60 largest private banks have provided more than $5.5 trillion in financing to the fossil fuel industry, flouting their pledges to put themselves and their clients on a path to net-zero greenhouse gas emissions as the window to avert the worst consequences of the intensifying climate crisis rapidly closes.

But banks' underwriting activities receive far less attention than their direct lending practices, even though both are instrumental in enabling fossil fuel expansion and must be reformed to rein in the industry most responsible for imperiling the planet's livability.

That's the key takeaway from a new analysis of Wall Street's participation in capital markets published by the Sierra Club's Fossil-Free Finance campaign.

"Banks play a vital role in capital markets," the report explains. "Acting as underwriters, they are the gatekeepers of fossil fuel companies: they advise companies issuing bonds and equities, hold the vital information on the issuer, and help market the instruments to investors disclosing only the necessary risk."

Since 2016, the six largest U.S. banks—JPMorgan Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs—have provided more than $433 billion in lending and underwriting to 30 of the companies doing the most to increase fossil fuel extraction and combustion worldwide, the report notes.More than three-fifths (61%) of that financing comes from underwriting, with those half-dozen banking giants issuing $266 billion in new bonds and equities for the world's top 30 fossil fuel expansion firms.

Climate justice advocates have long criticized the concept of "net-zero" because, they argue, allowing planet-heating pollution to be "canceled out" via dubious carbon offset programs or risky carbon removal technologies is an accounting trick that doesn't guarantee the significant emissions cuts needed to avoid the climate emergency's most destructive impacts.

But even if one accepts the premise of net-zero, big U.S. banks' policies on the topic are misleading.

"Despite the importance of capital markets activities in helping fossil fuel companies secure new funding, banks focus primarily on lending, while downplaying the importance of underwriting,when setting their emissions reduction targets," the report says. "Banks are performing sleight of hand, distracting investors and regulators with net-zero transition plans that are half-finished, while continuing to funnel money to fossil fuel companies via capital markets with limited scrutiny."

In a statement, Adele Shraiman, senior campaign strategist with the Sierra Club's Fossil-Free Finance campaign, said that "without banks, fossil fuel companies cannot raise money through capital markets."

"By downplaying their role in capital markets and refusing to include facilitated emissions in their climate targets, big U.S. banks are intentionally sidestepping a major source of real-world emissions and making it impossible to meet their own net-zero commitments," said Shraiman.

According to the report: "Only three of the six major Wall Street banks include bond and equity underwriting in their sectoral emissions reduction targets—JPMorgan Chase, Goldman Sachs, and Wells Fargo. The remaining three banks have so far chosen to only apply emissions reduction targets to lending activities."

However, "even among those who have set emissions reduction targets that include underwriting, insufficient disclosures and lack of standardization make it difficult to understand how robust banks' facilitated emissions accounting methodologies are, and what progress they are making toward achieving their emissions reduction targets," the report adds.

In a blog post, Shraiman wrote that "banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate and hurting communities."

"But investors, regulators, and customers around the world see through their duplicity," she continued. "We are demanding complete, robust, and transparent net-zero plans that cover all types of financing activities and will lead to real-world emissions reductions in line with our global climate goals."

Monday's report comes at a key moment in the fight to stop Wall Street from continuing to fund climate chaos.

As the Sierra Club observed, "Banks currently point to a lack of industry standardson underwriting to justify why they do not disclose or set targets for facilitated emissions." However, the industry-led Partnership for Carbon Accounting Financials is expected to release its updated methodology on accounting for and reducing facilitated emissions in the near future.

"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," Shraiman said. "By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."

"It's time," she added, "for the major Wall Street banks to adopt a robust and consistent methodology for accounting facilitated emissions, and take full responsibility for the climate impacts of their underwriting decisions."

The International Energy Agency has stated unequivocally that there is "no need for investment in new fossil fuel supply in our net-zero pathway."

After the Intergovernmental Panel on Climate Change released its latest assessment in March, United Nations Secretary-General António Guterres said that limiting temperature rise to 1.5°C is possible, "but it will take a quantum leap in climate action," including a ban on approving and financing new coal, oil, and gas projects as well as a phaseout of existing fossil fuel production.

https://www.alternet.org/fossil-fuel-2662235056/

https://corpgov.law.harvard.edu/2019/01/31/the-long-view-us-proxy-voting-trends-on-es-issues-from-2000-to-2018/

7 23 an no lnx

Inside the fossil fuel industry’s insidious plan to end responsible investing

Jessica Church, Common Dreams and Inequality.org July 06, 2023

In a recent Gallup poll, the vast majority of Americans surveyed said they were not even “somewhat familiar” with the term “ESG.” But on Capitol Hill, Republicans have developed a fixation on the issue, holding not one but two intensely partisan hearings on the topic.

“Republicans Are Losing Their Minds Over ESG” read one headline.

“Anti-ESG talk leads to partisan fireworks” read another.

Now you may be wondering, what the heck is ESG? What’s anti-ESG? What the heck is “woke” capitalism? And why should I care?

What Is ESG?

ESG stands for “Environmental, Social, and Governance,” which are categories of metrics that businesses use to assess performance and risk on a range of issues.To reduce risk and create value over the long term, businesses may seek to reduce carbon emissions (Environmental), improve working conditions for workers through racial equity and other measures (Social), or take steps to bring executive compensation closer in line with the company’s median salary (Governance).

Companies’ practices on ESG metrics can have an impact on future performance, so there is tremendous value in understanding long-term risks associated with environmental, social, and governance factors.

The simple concept that businesses should care about their communities and their workers and govern themselves accordingly is not new. In the 1980s, some companies and banks stopped doing business in South Africa to protest racial Apartheid. In the 1990s, a number of institutional investors divested from the tobacco industry as a way to take a stand against the harmful and deceptive practices of companies like Phillip Morris and R.J. Reynolds. And in the 2000s and 2010s, support for environmental shareholder proposals grew substantially in response to the worsening climate crisis.

Who’s Against It?

This leads us to the current backlash. “Anti-ESG” efforts, promulgated by long-time conservative organizations like theHeritage Foundation and American Legislative Exchange Council (ALEC) and newly prominent groups like the Committee to Unleash Prosperity, Consumers’ Research, and the State Financial Officers Foundationall have one things in common—connections to conservative big money donors in the oil and gas industry.

“The anti-‘woke investing’ movement was not created by financial experts,” observed environmental reporter Emily Aktin, “It was created by two of the fossil fuel industry’s most notorious climate disinformers.”

The anti-ESG movement is a well-funded and well-organized campaign led by top conservative political operatives.

Big Oil wants to end ESG investing and ESG business practices because they’re at odds with the continued growth of the fossil fuel industry. Big Oil would rather let our planet burn and increase short-term profits than adjust its business practices to stave off the worst of the climate crisis and invest in long-term profits.

Big Oil also wants you to think that this “anti-ESG” movement is organic, that it emerged from the conservative grassroots, but that could not be further from the truth. The anti-ESG movement is a well-funded and well-organized campaign led by top conservative political operatives. I recently corresponded with Meaghan Winter, author of All Politics Is Local, who explained that:

“Ideological donors and their foundations and think tanks have deliberately chosen to push their agendas through obscure-seeming front groups that work incrementally on the state level because they don’t want to call attention to the profound (and very unpopular) changes they are initiating. This strategy is decades-old, it has worked against unions and abortion and more, and the anti-ESG effort is just one of the latest incarnations.”

One shining example of this is the recent House Oversight Subcommittee hearing on ESG, where the majority witnesses (those called by the GOP, because Republicans control the House of Representatives right now) wereMandy Gunasekara from the Independent Women’s Forum, Jason Isaac from the Texas Public Policy Foundation, and Stephen Moore from the Heritage Foundation. These organizations have a long history of receiving financial support and carrying water for the oil and gas industry, including Koch Industries, ExxonMobil, and Chevron.

Watch Congresswoman Summer Lee lay it out for us, plain and simple.

Why Does This Matter?

While the right wing foments a culture war crusade and attempts to make ESG the next critical race theory (“CRT”), the fear mongering campaign has real-world impacts on investors and companies who are scared of being caught in the backlash. For example, some private companies are now backpedaling on their climate commitments.

To be clear, this is what the funders of this movement want.

In December, Vanguard, the world’s second largest asset management firm, pulled out of the Net Zero Asset Managers initiative, which was a voluntary industry-led effort to reach net-zero emission targets by 2050. This was a major setback for anyone who cares about the health and shape of our environment, because Vanguard manages roughly $7 trillion in assets. In order to meet the goals of the Paris Agreement—less than 1.5°C of global warming above pre-industrial levels—global markets must shift capital away from the fossil fuel industry and toward renewable energy systems.

But this goes beyond the climate crisis. In recent years, workers and shareholders have been demanding more corporate accountability on workplace safety, workers’ freedom of association, data privacy, racial equity, and executive compensation, among other issues that fall into the Social and Governance categories of ESG. The right-wing campaign against ESG is a campaign to roll back these victories.

How Do We Fight Back?

My organization, Take on Wall Street, is organizing with unions, public interest groups, and grassroots groups to fight back against this regressive movement. But it’s not just about playing defense. We also need a forward-looking vision for worker power, climate justice, and racial equity. Watch this space.

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Fossil Fight

Basaldú is fighting plans by Houston-based oil and gas company NextDecade to build a $10 billion facility on the South Texas coast near his hometown of Brownsville. The scheme would supercool fracked gas from the Permian Basin for export as liquefied natural gas (LNG).

Community members say the Central Park-sized project — known asRio Grande LNG— would blanket low-income Latinx and Indigenous communities with harmful air pollution, cause irreversible harm to precious wetlands, threaten endangered wildlife, and accelerate climate breakdown via its associated carbon emissions.

The future of Rio Grande LNG and other planned export terminals had looked looked increasingly in doubt as demand for energy slumped during the COVID-19 pandemic. In November, 2020, French utility Engie dealt the sector a further blow when it pulled out of negotiations over a long-term deal to buy LNG cargoes from Rio Grande LNG amid reports that the French government was concerned over methane emissions from the Permian Basin.

But the picture has since changed dramatically as Russia’s invasion of Ukraine has triggered a European scramble for alternatives to Russian gas — bringing once moribund projects back to life. In May, NextDecade announced that Engie had returned to the negotiating table and signed a 15-year contract to buy cargoes from Rio Grande LNG starting as early as 2026.

The project took another step forward in September, when Credit Suisse helped NextDecade launch a private share placement in anticipation of a final investment decision, Offshore Energy reported.

Barclays and HSBC are linked to the scheme through their role as big financiers of oil majors ExxonMobil and Shell,which have also signed contracts to purchase shipments from Rio Grande LNG, according to a report by the Sierra Club and allied organisations. The two banks also have smaller exposures to Engie, according to Banking on Climate Chaos, a report by advocacy groups.

Barclays, HSBC and Credit Suisse declined to comment.

Indigenous Resistance

Basaldú made the trip to London with Bekah Hinojosa, an artist and community organiser who has also been campaigning against Rio Grande LNG since the project was proposed eight years ago, and serves as the Sierra Club’s Gulf Coast campaign representative.

The pair were accompanied by Oliveria Montès Lazcano, the coordinator of the National Institute of Indigenous Peoples in the central Mexican state of Puebla. Lazcano is fighting TransCanada’s project to build the Tuxpan-Tula pipeline to import gas to central Mexico from Texas. HSBC, Credit Suisse, and Barclays finance TransCanada, campaigners say.

Indigenous networks have been mobilising increasingly effective opposition to fossil fuel infrastructure in recent years, playing key roles in the defeat of flagship projects in North America including the Keystone XL tar sands pipeline and the Atlantic Coast gas pipeline.

A report by the Indigenous Environmental Network and Oil Change International published last year found that Indigenous communities resisting more than 20 fossil fuel projects analysed had stopped or delayed greenhouse gas pollution equivalent to at least 25 percent of annual U.S. and Canadian emissions.

With the world’s 60 largest private banks extending $4.6 trillion of finance for fossil fuels since the Paris Agreement was signed in 2015, according to Banking on Climate Chaos, indigenous groups are increasingly seeking to persuade bankers to pull the plug on polluting projects.

In 2017 French Bank BNP Paribas pledged to stop granting dedicated financial supportfor fracked gas pipelines and export terminals in North America several months after a previous delegation of Indigenous leaders from South Texas visited Paris and gained significant attention, speaking on radio shows and at rallies and shareholder meetings.

Indigenous groups from Ecuador and Peru scored further concessions in 2021 by persuading BNP Paribas, Credit Suisse, ING, and other European banks to stop financing the export of crude oil from the Ecuadorian Amazon after advocacy groups Stand.earth and Amazon Watch published data revealing their multi-billion dollar exposure to the trade.

...

https://www.commondreams.org/news/2022/03/30/despite-splashy-net-zero-vows-big-banks-dumping-trillions-fossil-fuels

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Despite 'Splashy' Net-Zero Vows, Big Banks Dumping Trillions Into Fossil Fuels

"With Wall Street banks leading the charge, these financial institutions are directly complicit in undermining a climate-stable future for us all."

JAKE JOHNSON

March 30, 2022

That's according to the latest edition of :{Banking on Climate Chaos:(style="box-sizing:border-box"):}:, an annual report that tracks the banking industry's funding of oil and gas initiatives that are threatening global hopes of reining in carbon pollution and averting climate disaster.

Flouting their public vows to put themselves and their clients on a path to net-zero greenhouse gas emissions, the world's 60 largest private banks have provided a total of $4.6 trillion in financing for the fossil fuel industry since the Paris Agreement entered into force in 2016.

That's according to the latest edition of Banking on Climate Chaos, an annual report that tracks the banking industry's funding of oil and gas initiatives that are threatening global hopes of reining in carbon pollution and averting climate disaster.

"Any further expansion of fossil fuels risks locking humanity into generations of climate catastrophe."

Authored by Oil Change International, the Rainforest Action Network, the Indigenous Environmental Network, and other groups and endorsed by hundreds of organizations from around the world, the report published Wednesday spotlights the marked contrast between banks' public commitments to net-zero emissions targets and their actions, which reflect a continued stake in fossil fuel development.

In 2021 alone, the report finds, the world's biggest private-sector banks financed oil and gas to the tune of $742 billion.That year, the 60 banks featured in the new analysis poured $185.5 billion into the 100 companies doing the most to expand the fossil-fuel sector worldwide through offshore drilling, fracking, coal mining, liquefied natural gas infrastructure, and more.

The worst offenders in the banking industry, according to the report, are the U.S. financial behemoths JPMorgan Chase, Citi, Wells Fargo, and Bank of America, which together accounted for 25% of all fossil fuel financing identified over the past six years.

The report highlights a number of specific projects, including the Mountain Valley Pipeline(funded by JPMorgan Chase, Wells Fargo, and Bank of America), drilling in offshore Guyana (funded by JPMorgan Chase, Citi, and Bank of America), and the Line 3 Pipeline (funded by TD, Scotiabank, and the Bank of Montreal), efforts that have drawn fierce resistance from Indigenous communities.

"Indigenous peoples have long been leading the fight for the sacredness of the land, water, and Earth," Mea Johnson, divestment campaign coordinator with the Indigenous Environmental Network, said in a statement Wednesday. "Mother Earth has always given us what we need to thrive. We will not back down until our natural balance is restored and anyone helping fund the extractive destruction of our communities will be held accountable."

Alison Kirsch, research and policy manager at the Rainforest Action Network, added that "any further expansion of fossil fuels risks locking humanity into generations of climate catastrophe, yet the top fossil clients of the world's largest banks are still being showered with tens of billions of dollars even as they actively expand drilling, mining, fracking, and other fossil fuel development unabated."

"With Wall Street banks leading the charge," Kirsch added, "these financial institutions are directly complicit in undermining a climate-stable future for us all and must immediately end their support of any further fossil fuel infrastructure expansion."

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The banks' financing decisions fly in the face of their own pledges to bring their policies into line with critical climate goals, such as achieving net-zero greenhouse gas emissions by 2050, a benchmark that 44 of the 60 banks profiled in the new report have backed.

"Despite their splashy climate pledges, big banks have largely continued with business-as-usual."

According to the International Energy Agency, reaching net-zero emissions by 2050 would mean ensuring "no new oil and gas fields."

"But global banks have massively supported the companies doing the most to open new oil and gas fields," notes the new report. "Banks with net-zero commitments last year... financed the top 20 upstream oil and gas expansion companies, potentially helping to lock the planet into decades of climate-warming emissions."

Adele Shraiman, a representative for the Sierra Club's Fossil-Free Finance campaign,said Wednesday that the analysis "makes it clear that banks must clean up their act and stop funding the expansion of dirty fossil fuel projects like fracked gas exports, tar sands pipelines, and offshore drilling in order to align with what the science demands and what their own commitments require."

"Despite their splashy climate pledges, big banks have largely continued with business-as-usual and actually increased their overall fossil fuel financing since the Paris Agreement," said Shraiman. "As we look ahead to shareholder season, we'll be keeping up the pressure on the banks and their investors to take these critical reforms seriously and stop bankrolling the fossil fuel industry's reckless expansion plans."

an 621

The European Union is shaking up the financial world by excluding a group of large banks from participating in the marketing of bonds being floated to help in the economic recovery of member states.

According to reports in various business publications, the 10 banks are being singled out because of their involvement in cases in which they were accused of manipulating bond and currency markets. In other words, they are being punished for misconduct.

These moves may not have a major bottom-line impact on the banks—which include U.S. giants JPMorgan Chase, Citigroup and Bank of America. But the EU is sending an important message about corporate wrongdoing.

Large companies have come to assume they can essentially buy their way out of legal jeopardy by paying fines and settlements that have grown larger but arein still far from seriously punitive. As Violation Tracker documents, the big banks are Exhibit A for this phenomenon.

The database shows that the financial sector overall has paid more than $300 billion in U.S. penalties in the past two decades, far and away more than any other part of the economy.

Bank of America is at the top of the list of penalty payers, with $82 billion; JPMorgan, second with $35 billion;Citigroup, fourth with $25 billion.

Deutsche Bank on the List

Non-U.S. banks being singled out by the EU have also accumulated substantial U.S. penalties, apart from what they have paid elsewhere. For example, Deutsche Bank paid $18 billion and NatWest (formerly the Royal Bank of Scotland) $13 billion.

The EU's move is focused on a particular set of scandals in which these banks were alleged to have colluded to rig markets.

Among these are cases involving the manipulation of currency markets. In 2015, Citigroup, JPMorgan, Barclays and Royal Bank of Scotland each paid hundreds of millions of dollars in settlements to resolve criminal charges brought by the U.S. Department of Justice.

Unlike many other situations in which large corporations are offered deferred prosecution or non-prosecution agreements, the banks in this case had to plead guilty to the felony charges.

Yet there was little in the way of consequences beyond the penalty payments. The banks were put on probation, on the assumption this would cause them to cease their bad behavior. Yet all the banks continued to rack up regulatory violations in subsequent years.

€86 Million Hit

Reuters estimates that the blacklisted banks will lose out on about 86 million euros in syndication fees. This is a lot less than what the banks have paid in penalties. Yet, if banks begin to see that misconduct will cause them to be excluded from business opportunities, that may be more of an inducement to avoid corrupt behavior.

The dilemma for policymakers is that misconduct is so widespread in the financial sector that it is difficult to find service providers with clean hands. While excluding the 10 banks, the EU turned to a group of others to handle the debt issue. Those included the likes of HSBC and BNP Paribas, which have their own substantial corporate rap sheets. Perhaps a larger blacklist is needed.

This article is from Dirt Diggers Digest.

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220 ew

https://www.ecowatch.com/jp-morgan-economists-climate-crisis-2645218658.html

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Julia Conley

Climate campaigners on Friday expressed hope that policymakers who are stalling on taking decisive climate action would reconsider their stance in light of new warnings from an unlikely source: two economists at J.P. Morgan Chase.

Extinction Rebellion spokesperson Rupert Read revealed Thursday that he had obtained a report, entitled "Risky Business: Climate and the Macroeconomy," by J.P. Morgan economists David Mackie and Jessica Murray. The report issued warnings to bank clients similar to those promoted by climate action groups — describing extreme weather events and global conditions that could result from the continued extraction of fossil fuels.

In doing so, the economists implicated the bank's own investment activities in the potentially catastrophic effects of the climate crisis.

J.P. Morgan is the world's largest financial backer of fossil fuel companies, helping to fund fracking, pipeline projects, and Arctic oil and gas exploration. The company has contributed $75 billion to such projects since the Paris climate agreement was forged in 2015. The agreement called on governments to reduce fossil fuel emissions to help limit global heating to 1.5° Celsius above pre-industrial temperatures.

If activities like the ones funded by J.P. Morgan continue to release fossil fuels into the atmosphere, Murray and Mackie wrote, "We cannot rule out catastrophic outcomes where human life as we know it is threatened."

Failing to move away from global systems that scientists agree are causing the planet to warm "would likely push the Earth to a place that we haven't seen for many millions of years," they added.

On Twitter, Read pointed out the incongruity of such "radical truth-telling" coming from J.P. Morgan.

Others highlighted the report as one that might catch the attention of others in the financial services industry and people who believe bold climate action is a cause embraced by a minority of extremists.

"Hardly a bank you could call communist now, is it?" tweeted journalist Dom Phillips.

Citing reports by the International Monetary Fund (IMF) and the Intergovernmental Panel on Climate Change (IPCC), the authors note that with the status quo kept in place, the planet is expected to reach a temperature 3.5° above pre-industrial levels.

In addition to major impacts on the world economy, the authors wrote, the climate crisis will affect human health, water supplies, and migration.

The report comes just weeks after CNBC host Jim Cramer announced fossil fuel investments are "in the death knell phase" and that "the world's turned on" the industry as it did on tobacco as understanding grew about the risks of smoking.

"It is clear that the Earth is on an unsustainable trajectory," reads the report. "Something will have to change at some point if the human race is going to survive."

The authors advocated for a global carbon tax but said, "This is not going to happen anytime soon" and called the continued investment in climate-warming fossil fuels a global problem with "no global solution ... in sight."

Bill McKibben, co-founder of 350.org, suggested that as one solution, the economists "might want to talk with the Chase bankers who are guaranteeing [climate catastrophe] will happen by lending oil companies endless cash."

Activist Becky Brunton said the report offers the latest evidence that those with the power to stop supporting fossil fuel projects are fully aware of the damage their investments are doing to the planet.

"They know. They ALL know,"tweeted Brunton. "But the now (profits) outweighs the future (earth)."

Reposted with permission from Common Dreams.

https://www.alternet.org/2020/01/giant-megabanks-have-saved-billions-of-dollars-thanks-to-gop-tax-cuts-but-have-been-cutting-not-adding-jobs-report/

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Giant megabanks have saved billions of dollars thanks to GOP tax cuts — but have been cutting, not adding, jobs: report

Written by Alex Henderson January 17, 2020

In late 2008 — when George W. Bush was in the final months of his presidency and the Great Recession was accelerating — the term “too big to fail” was used to describe megabanks that were pleading for bailout money. But many of the megabanks that feared for their survival during the 2008 crash not only survived; they grew even larger. And journalist Dino Rabouin, in an article published by Axios on January 17, reports that for two years in a row, megabanks have been saving billions of dollars thanks to the GOP’s Tax Cuts and Jobs Act of 2017.

Drawing on data from Bloomberg News, Rabouin notes that the GOP tax law “helped power the biggest U.S. banks to record profits for the second straight year.” Yet “struggling workers,” according to Rabouin, are not the main beneficiaries.

“The tax cut was sold as a way to revitalize hiring and spending by American companies to boost the economy and help struggling workers,” Rabouin observes, “but the windfall is largely staying with banks and their shareholders…. Rather than use the money to hire a bonanza of workers or invest in big new capital projects or equipment, the banks used it largely to buy back stock and pad their balance sheets.”

Rabouin notes that “JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley announced earnings this week showing they saved $18 billion in 2019, and their average effective tax rate fell to 18% from 20%. Banks had previously paid effective tax rates of around 30%, Bloomberg found.”

But despite all the money they saved in taxes, megabanks haven’t been increasing the size of their workforce. Rabouin writes, “The big banks have actually shed jobs since passage of the tax cut law, collectively reducing their workforce by 1200 people since 2017, Bloomberg reported.”

https://www.alternet.org/2019/12/its-a-wonderful-life-for-bankers/

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‘It’s a Wonderful Life’… for bankers

Written by Christopher W. Shaw / Common Dreams December 27, 2019

Christmas movies provide a yearly opportunity to imagine a more caring society. Among the favorites that are watched year after year, It’s a Wonderful Life stands out for stressing the importance of banking to such a society. The film’s hero George Bailey is an honest and generous Main Street banker who has helped struggling working people achieve their dreams of homeownership. Yet Bailey is on the brink of committing suicide before discovering just how much his life has meant to the local community. On this fateful night, an alternative future is revealed in which Bailey never existed, and his beloved hometown of Bedford Falls has fallen into the clutches of the greedy Henry Potter, owner of the town’s largest bank and a man who cares nothing for the public welfare. Without Bailey to finance the hopes and aspirations of his neighbors, Potter has created an unrecognizable town that is defined by corruption, slum housing, pawn shops, and seedy bars.

While we often consign the subject of finance to bankers, the annual tradition of watching It’s a Wonderful Life serves as an unexpected reminder of just how much power finance exerts over all of our lives. The figures of Bailey and Potter represent contrasting models for how banking can be conducted. Bailey’s bank is an asset to Bedford Falls, while Potter’s bank exploits the community. Bailey’s bank provides depositors with safety and makes affordable loans available to working people, while Potter’s bank focuses solely on benefiting its owner. Potter will fund only those projects that produce the most profit for himself, and he has no regard for the impact his decisions have on others.

It’s a Wonderful Life may be fiction, yet its release in 1946 registered a half-century long struggle to make banking democratic. During the Gilded Age, when working people thought of bankers they envisioned Henry Potter. Americans were more likely to see J. P. Morgan as a personification of greed than to honor his business achievements. Such economic disasters as the Panic of 1907 and the Great Depression exposed the banking system’s flaws, inspiring everyday Americans to engage in regular discussions of financial policy and proposed banking reforms. All too frequently, small depositors lost their life’s savings in bank failures that resulted from mismanagement and even fraud. And banks typically declined to extend the affordable small loans necessary for homeownership and operating farms.

For decades, working people sought to have the national government make banks safer and loans more accessible. Labor union and farm organization meetings routinely backed these reforms. The residents of one Nebraska town declared their support for federal farm loans “at a low rate of interest.” Among the voices that promoted the idea that government should guarantee bank deposits was the Chicago Federation of Labor, which insisted such a program would be “comprehensive and effective.” Meanwhile, bankers vehemently opposed these policy proposals as government overreach.

Amid the severe economic crisis and banking meltdown of the early 1930s—when thousands of banks failed—grassroots agitation for financial reform produced mailbags filled with letters and telegrams demanding government action. In response to the constituent mail piling up on Capitol Hill and at the White House, President Franklin D. Roosevelt’s New Deal reformed the banking system so that it better served ordinary citizens. Roosevelt signed a law creating the Federal Deposit Insurance Corporation (FDIC) to protect bank depositors. The New Deal also introduced important measures that provided farmers and homeowners with reliable supplies of low-cost credit.

Thanks to New Deal financial reform, by the 1940s bankers started looking less like Henry Potter and more like George Bailey. Grassroots engagement with financial issues had made banking more humane. For the first time in American history, bank failures became rare events. Farmers benefited from easier access to credit and homeownership would rise significantly. Once achieved, however, ordinary citizens started to take this reformed financial order for granted. Working people began to neglect financial issues following World War II, leaving an opening forindustry lobbyiststo direct banking policy. By the close of the twentieth century, deregulation had allowed the Potters of the banking world to resume their former practices. The economic crisis of 2008 led many Americans to consider the degree that their nation has come to look less like Bedford Falls and more like Pottersville. When voters cheer on Bernie Sanders and Elizabeth Warren for criticizing Wall Street, it’s a call to bring back George Bailey.

Christopher W. Shaw is the author of Money, Power, and the People: The American Struggle to Make Banking Democratic (University of Chicago Press, 2019). Follow him on Twitter: @chris_w_shaw.

Wall Street Banks Court Moderate Democrats to Blunt Warren's Hostility (The New York Times*)*

Wall Street bank lobbyists are seeking moderate Democratic allies in Congress to deprive Elizabeth Warren of votes and curb policies they consider hostile to their interests.

https://news.littlesis.org/2019/08/14/private-prisons-now-face-87-4-financing-gap-as-banks-continue-to-flee-industry

As of August 2019, eight banks – JPMorgan Chase, Wells Fargo, Bank of America, SunTrust, BNP Paribas, Fifth Third Bancorp, Barclays, and PNC – have publicly committed to ending their future financing relationships with the private prison industry, including CoreCivic and GEO Group. Together these eight banks represent an estimated $2.35 billion – or 87.4% – of the credit lines and term loans that are central to these companies’ operations.

Notably, all of the banks that provide credit and term loans to GEO Group have committed to end their future financing relationships with the industry. These commitments are the result of ongoing campaigns from #FamiliesBelongTogether and #BackersOfHate to end Wall Street’s financing and profiting off of the private prison industry.

This mass exodus of banks has had a cascading effect on the industry. Fitch Ratings, one of the three premier credit rating agencies, recently downgraded CoreCivic from BB+ to BB. This downgrade will make it more difficult for CoreCivic to secure the plentiful, cheap credit and loans they have accessed in the past.

Moreover, California’s $356 billion pension fund, CalPERS, is now considering divesting from the industry due to “egregious activities” at the border and the increased riskiness as banks continue to flee. Finally, CBS MoneyWatch reported that stock values for CoreCivic (CXW) and GEO Group (GEO) have been cut in half since April 2017.

Estimated Impact on CoreCivic and GEO Group’s Future Financing

As shown in the chart below, these eight banks provide an estimated combined $2.352 billion of GEO and CoreCivic’s financing, or 87.4% of the total financing currently available to these private prison companies. Given the eight banks’ commitments to provide no new financing, GEO Group and CoreCivic will potentially face a $2.352 billion shortfall when the current agreements expire.

	GEO Group	CoreCivic	CoreCivic
	Line of credit & term loan*	Line of credit	Term loan
JPMorgan Chase	$282,000,000	$112,000,000	$28,000,000
Bank of America	$282,000,000	$112,000,000	$28,000,000
SunTrust	$282,000,000	$112,000,000	$28,000,000
Wells Fargo	$282,000,000
BNP Paribas	$282,000,000
Barclays	$282,000,000
PNC		$112,000,000	$28,000,000
Fifth Third Bancorp		$80,000,000	$20,000,000
Total	$1,692,000,000	$528,000,000	$132,000,000
Grand Total	$2,352,000,000	$2,352,000,000	$2,352,000,000

Source: U.S. Securities and Exchange Commission filings for GEO Group and CoreCivic

* While GEO Group reports its total credit line and loan debt, it does not make specific commitment amounts for each participating bank publicly available. The breakdown in this table is an estimate.

As Real Estate Investment Trusts (REITs), CoreCivic and GEO Group are able to keep their income taxes low as long as they pass on much of their income to shareholders. This means that these companies depend heavily on short term borrowing through lines of credit and loans to keep their operations funded day-to-day. An 87.4% shortfall in the availability of that financing could therefore materially impact their ability to do business as usual.

The Industry Response

Indeed, these companies can no longer deny the writing on the wall. GEO Group’s March 2019 quarterly report acknowledged the impact of these shifts:

“Public resistance to the use of public-private partner- ships for correctional, detention and community-based facilities could result in our inability to obtain new contracts or the loss of existing contracts, impact our ability to obtain or refinance debt financing or enter into commercial arrangements, which could have a material adverse effect on our business, financial condition and results of operations.”

In their August 2019 Q2 investor call CoreCivic’s CEO Damon Hininger derided the banks’ decisions to no longer finance his company:

“Despite many of the banks claims of conducting a thorough review process, they clearly bow down to a small group of activists protesting and conducting targeted social media campaigns pushing false information rather than engage in a constructive dialogue about the facts… The most disappointing aspect of these politicized bank decisions, disingenuous activists efforts, and no solution proposals from politicians, is the people who they ultimately hurt. It hurts the American people because of poor policies are being discussed, made or awarded based on misinformation rather than an open and honest dialogue on the challenges at hand.”

From GEO Group’s inclusion of public resistance in their SEC filing and the CoreCivic CEO’s tone on the investor call, it is clear that these companies are on the defensive and recognize the financial impact they are facing.

AN norman solomaN 619

...t an erstwhile Biden fundraiser, Tom McInerney, didn’t show up at the Stanton poolside event, even though he was listed on the invitation. McInerney, who was a member of Biden’s national finance committee, said he notified the Biden campaign on June 20 that he would no longer fundraise for it, citing the candidate’s recent fond comments about segregationist senators. (Actually, Biden had been on the record for many years with such warm reminiscences. And in a report first published on April 11, CNN had exposed Biden’s letters to racist senators in 1977 and 1978, seeking support for his legislation against school busing for desegregation.)

Quoting McInerney as saying that “I would imagine I’m not alone,” CNBC reported on the day after Biden’s debate pratfall: “While McInerney is the first financier to publicly withdraw his support after Biden’s controversial round of comments, the loss is significant because it could be a harbinger of further defections.”

Overall, market conditions have abruptly changed, in the midst of fierce competition for big-investor dollars.

The New York Times did some candid reporting in mid-June under the headline “Wall Street Donors Are Swooning for Mayor Pete. (And They Like Biden and Harris, Too.)” The story explained that “the behind-the-scenes competition for Wall Street money in the 2020 presidential race is reaching a fevered peak . . . as no less than nine Democrats are holding New York fund-raisers in a span of nine day.” And, “with millions of dollars on the line, top New York donors are already beginning to pick favorites, and three candidates are generating most of the buzz”—Biden, Harris and Buttigieg.

...

https://www.desmog.co.uk/2019/03/20/jpmorgan-chase-tops-banks-financing-fossil-fuels-climate-change

A report published today names the banks that have played the biggest recent role in funding fossil fuel projects, finding that since 2016, immediately following the Paris Agreement's adoption, 33 global banks have poured $1.9 trillion into financing climate-changing projects worldwide.

The top four banks that invested most heavily in fossil fuel projects are all based in the U.S., and include JPMorgan Chase, Wells Fargo, Citi, and Bank of America. Royal Bank of Canada, Barclays in Europe, Japan’s MUFG, TD Bank, Scotiabank, and Mizuho make up the remainder of the top 10.

This report comes as March has already brought deadly weather to places such as the American Midwest, where historic flooding has left four dead and farm losses could reach $1 billion, and Mozambique, where Tropical Cyclone Idai has devastated the East African country and President Filipe Nyusi estimated that more than a thousand people are likely dead.

Both disasters have been linked to climate change. “Increased flooding is one of the clearest signals of a changing climate,” said 350.org co-founder Bill McKibben in a statement published by ThinkProgress, adding that flooded Nebraska’s “current trauma is part of everyone’s future.”

“One inescapable finding of this report is that JPMorgan Chase is very clearly the world’s worst banker of climate change,” the report, titled “Banking on Climate Change,” found. “The race was not even close: the $196 billion the bank poured into fossil fuels between 2016 and 2018 is nearly a third higher than the second-worst bank, Wells Fargo.”

A half-dozen environmental groups — Rainforest Action Network, BankTrack, Sierra Club, Oil Change International, Indigenous Environmental Network, and Honor the Earth — authored the 2019 report, which was endorsed by 160 organizations worldwide. It tracked the financing for 1,800 companies involved in extracting, transporting, burning, or storing fossil fuels or fossil-generated electricity and examined the roles played by banks worldwide.

Global Snapshot of Fossil Fuel Sector Finance

Past report cards by the groups have focused only on coal, or on “extreme” fossil fuel projects, like tar sands extraction, ultra-deepwater oil drilling, and coal mining, and power generation. 2019’s report card expands, for the first time, to cover the fossil fuel sector as a whole.

Total fossil fuel financing, in billions of U.S. dollars, by bank and year, 2016-2018. Credit: Banking on Climate Change 2019 report

This year’s report card also dived deep into lending to shale oil and gas companies for the first time, finding that Wells Fargo and JPMorgan Chase “are the biggest bankers of fracking overall — and, in particular, they support key companies active in the Permian Basin, the epicenter of the climate-threatening global surge of oil and gas production.”

JPMorgan Chase also provided the most financing to LNG projects, Arctic oil and gas projects, and ultra-deep-water oil and gas extraction, the report concluded. The Royal Bank of Canada topped the list on tar sands oil financing.

“Coal mining finance is dominated by the four major Chinese banks, led by China Construction Bank and Bank of China,” the 2019 report found, adding that Bank of China provided the most financing to coal power projects as well.

On March 19, China’s State Development & Investment Corp., listed as one of the report’s top coal power companies, reportedly confirmed that it would stop investing in thermal coal power plants three years ahead of schedule.

“Since the Paris Agreement, JPMorgan Chase has provided $196 billion in finance for fossil fuels,” the groups wrote, “10 percent of all fossil fuel finance from the 33 major global banks.”

A JPMorgan Chase spokesperson declined to comment.

In 2017, JPMorgan Chase pledged to “facilitate $200 billon in clean financing through 2025,” adding that it had helped finance $18 billion of wind, solar, and geothermal projects between 2003 and 2017.

Barclays, which offered a total of $109 billion for fossil fuel projects, topped the 2019 report’s list of “worst in Europe,” followed by HSBC, with $77 billion in financing.

More Money for Fossil Fuels Since Paris Agreement

All told, financial backing for fossil fuel projects has grown, not shrunk, each year since the Paris Agreement, the report found. Banks provided $612 billion for fossil projects in 2016, $646 billion in 2017, and $654 billion in 2018.

That’s despite the fact that Article 2 of the Paris Agreement calls for “[m]aking finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development” — and in the run-up to Paris, major banks positioned themselves as supporting a strong global response to climate change.

“Scientific research finds that an increasing concentration of greenhouse gases in our atmosphere is warming the planet, posing significant risks to the prosperity and growth of the global economy,” JPMorgan Chase Bank, Bank of America Corp., Wells Fargo, Citibank, Goldman Sachs, and Morgan Stanley wrote in a 2015 statement. “As major financial institutions, working with clients and customers around the globe, we have the business opportunity to build a more sustainable, low-carbon economy and the ability to help manage and mitigate these climate-related risks.”

In 2017, JPMorgan CEO Jamie Dimon told CNBC that he opposed President Trump’s plan to pull the U.S. out of the Paris Agreement.

[Guerrilla street painting against fossil fuel pipeline investment outside Wells Fargo World Headquarters in San Francisco, November 6, 2017. Credit: Peg Hunter,CC BY-NC 2.0]

Activist pressure campaigns focused on individual banks have recently claimed successes. This week, JPMorgan Chase and Wells Fargo both announced plans to stop financing private prisons, which Moody’s Investment Services said in a comment “builds on the trend of negative publicity and uncertainty prevalent in the sector.”

The past year has brought increasing awareness of climate-related risks in some financial circles — but banks headquartered in the U.S. and Canada have lagged behind.

“According to a survey conducted by Boston Common Asset Management in 2018, European banks are far ahead of large banks in the U.S. and Canada in implementing climate-related risk assessments,” American Banker reported in January. “Specifically, 80 percent of European banks surveyed are, in some way, stress-testing their loan and investment portfolios for a 2-degree-Celsius increase in global temperatures, versus just 44 percent of banks in North America.”

A report issued last month by U.S.-based Morgan Stanley tallied $650 billion in climate-related disasters over the past three years — and predicted $54 trillion in damages worldwide by 2040, citing figures from the UN. “We expect the physical risks of climate change to become an increasingly important part of the investment debate for 2019,” the Morgan Stanley strategists wrote.

The Banking on Climate Change report finds that nonetheless, Morgan Stanley offered fossil fuel companies $19.48 billion in financing in 2018 (down from $23.7 billion the prior year), making it the world’s 11th largest financier of fossil fuel projects.

“Alarming is an understatement,” said lead author Alison Kirsch, a Rainforest Action Network researcher. “This report is a red alert.”

they're baaack

https://www.alternet.org/2019/03/the-global-economy-is-a-time-bomb-waiting-to-explode/

In the aftermath of the greatest financial calamity since the Great Depression, then–chief of staff for the Obama administration Rahm Emanuel made the call for aggressive action to prevent a recurrence of the meltdown of 2008.

Although the U.S. government’s system of checks and balances typically produces incremental reform, Emanuel suggested that during times of financial upheaval, the traditional levers of powers are often scrambled, thereby creating unique conditions whereby legislators could be pushed in the direction of more radical reform. That’s why he } that we should never let a crisis go to waste. Ironically, that might be the only pearl of wisdom we ever got from the soon-to-be ex-mayor of Chicago, one of those figures who otherwise embodied the worst Wall Street-centric instincts of the Democratic Party. But give Rahm props for this one useful insight.

But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.

To cite some examples, consider the case of the UK, where England’s local councils have taken on significant risk via structural financial products known as “LOBO loans” (lender option borrower option). Financial blogger Rob Carver explains how they work:

https://www.c-span.org/video/?457500-1/bankers-bailouts-struggle-tame-wall-street

2/19

Bankers, Bailouts, and the Struggle to Tame Wall Street

Kathleen Day talked about her book, Bankers, Bailouts, and the Struggle to Tame Wall Street, in which she provides a history of the federal government’s oversight of the financial sector.

an cody f 119

Despite his boasting about supposedly invigorating the economy, President Donald Trump has alienated many on Wall Street and in the financial industry with his erratic leadership, his trade wars, and his opposition to immigration.

This leaves many on Wall Street clamoring for a strong Democratic challenger in 2020. But according to new reports published Monday morning, insiders are particularly terrified of two potential nominees: Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT). Terrified, that is, that if either of them is elected, the financial industry might face serious regulation and oversight.

City of Angels Funds Some Hellish Fossil Fuel Projects

By Doug Norlen

This month the United Nations Intergovernmental Panel on Climate Change released a startling report, which finds that severe impacts of climate change are happening much sooner than previously expected, and that countries must take far more aggressive actions to avoid the most catastrophic impacts. The report finds that the burning of fossil fuels must be curbed sharply.

The harmful role Wall Street banks play in propping up fossil projects around the world is increasingly known. Yet there is much less awareness of the role major cities play when they place billions of dollars of their public funds into these same Wall Street banks. According to L.A. city records, as of July 2018, Los Angeles had banking and/or investment relationships with several Wall Street banks, many of which are notorious for their financing of fossil fuel and human rights debacles around the world, including JP Morgan Chase, Citi, Bank of America and Wells Fargo.

According to Banking on Climate Change, a fossil fuel finance report card, between 2015 and 2017 these Wall Street banks collectively provided over $50 billion in financing for tar sands, ultra-deep water drilling, coal mining, coal power and liquid natural gas projects around the world. These projects contribute vast amounts of greenhouse gases into the atmosphere, and many of them have severe local environmental, social and human rights impacts as well.

But in 2018, cities have more ethical options. Rather than investing the public's money in environmental and human destruction, cities can establish public banks. When properly structured and operated, public banks can prohibit the use of their funds for fossil fuel and other harmful projects. Instead, they can fund renewable energyand other green enterprises, affordable housing, education and low-cost loans to job-creating entrepreneurs—all while avoiding paying hundreds of millions of dollars in exorbitant fees to Wall Street banks.

The movement to establish public banks is growing nationwide. California is at the forefront, with efforts to pass state-wide legislation allowing establishment of municipal banks as well as campaigns to establish public banks in San Francisco, Oakland and other East Bay cities, Los Angeles and other municipalities.

When Los Angeles voters go to the polls next week, they will decide whether to approve Charter Amendment B, which amends the city's charter to enable it to take affirmative steps to establish a public bank. And Los Angeles is a great case study on the need for public banks. According to Public Bank L.A., the city maintains bank accounts with between $4 billion and $12 billion in cash, and manages up to $45 billion in investments through large commercial banks.

The enormous sum of public funds that L.A. entrusts to fossil fuel banks undercuts the climate leadership of city officials. For example, this past August L.A. Mayor Eric Garcetti joined a coalition of hundreds of mayors across the country to condemn Donald Trump's plans to weaken vehicle efficiency standards and rescind California's waiver right to set stronger greenhouse gas regulations. In December 2016, Garcetti joined other mayors to denounce Trump's decision to walk away from the Paris agreement. The city council has shown progressive streaks on banking issues as well. In December 2017, the Council unanimously voted to enforce both federal and state Community Reinvestment Act ratings disqualifying Wells Fargo from submitting a Request for Proposal for the city's commercial banking services. And yet, the city still banks with Wells Fargo.

If L.A. voters approve Charter Amendment B, the city will be one step closer to creating a municipal bank and redirecting its billions of dollars of public funds to environmentally sound, fiscally smart, sustainable community needs. In doing so, L.A. will serve as a beacon of progress to inspire the larger national movement to establish public banks.

For a sense of why Los Angeles so badly needs to approve Charter Amendment B, we've included descriptions of just a handful of the harmful projects Los Angeles is currently supporting by keeping its money in fossil fuel banks (based on publicly available information). Here is a sample of some of the projects that LA's banks support:

Dakota Access Pipeline (United States):

Citi — $235 million in project finance
MUFG — $235 million in project finance
Wells Fargo — $120 million in project finance

The Dakota Access Pipeline, or DAPL, extends over 1,000 miles across several U.S. states, damaging Native American ancestral lands and water. Passing within just a half-mile of the Standing Rock Indian Reservation, the pipeline has destroyed sacred sites and threatens the tribe's drinking water with potential oil spills. Beginning in 2016, Native American water protectors, including Standing Rock Sioux tribal elders and members, led opposition to DAPL. Supported by thousands of allies, this grew into one of the largest and most iconic movements in the world to halt fossil fuel pipelines. In response to peaceful, prayerful resistance, police from several states and agencies, members of the U.S. National Guard and armed private security forces used military equipment and tactics, including attack dogs, to intimidate, assault, arrest and otherwise commit grievous human rights abuses against water protectors and their allies. Opposition to the pipeline expanded far beyond the project site and supercharged the growing global movement against financial institutions that support fossil fuel projects.

Atlantic Coast Pipeline (United States):

Bank of America — $673.5 million in corporate loans (13)
Citi — $673.5 million in corporate loans (14)
JP Morgan Chase — $648 million in corporate loans (15)
MUFG — $1.182 billion in corporate loans (16)
Wells Fargo — $673.5 million in corporate loans (17)

The proposed 600-mile Atlantic Coast Pipeline, running from West Virginia through North Carolina, is the third longest gas pipeline in production or in some phase of development over the past 20 years in the U.S. Trees have been cleared along the pipeline route and infrastructure development has begun. Although two lawsuits against the pipeline are now pending in federal and North Carolina courts, federal law allows pipelines to be constructed prior to the resolution of all litigation. The ACP was the only oil or gas pipeline to be on Donald Trump's list of 50 Priority National Security Projects prior to his election.

According to published reports, the central purpose of the ACP is to enter South Carolina and eventually reach Elba Island, Georgia where gas will be exported from a liquid natural gas facility now under construction. This recognition raises serious concerns regarding the use of eminent domain to take privately owned property for private gain instead of public use.

The ACP threatens the livelihood of more than 30,000 indigenous peoples that live along the pipeline route. In May 2018, an alliance of community, statewide and national groups filed a complaint to the U.S. Environmental Protection Agency (EPA) Civil Rights Compliance Office, alleging that the North Carolina Department of Environmental Quality discriminated on the basis of race and color in issuing permits and certifications to the ACP as part of the permitting process. In September 2018, environmental groups filed legal challenges in an appeals court against federal permitting agencies.

Kusile Power Station (South Africa):

Bank of America — financial advisor
JP Morgan Chase — financial advisor
MUFG — part of 705 million euro corporate loan to South Africa's state power company, Eskom, to purchase boilers from Hitachi Power Europe for the Kusile coal power plant

Once completed, the 4,800-megawatt Kusile coal plant in South Africa will be one of the largest coal plants in the world. The estimated annual greenhouse gas equivalent emissions of the plant—30 million tons—would increase South African energy sector emissions by 12.8 percent and the country's total contribution to climate change by 9.7 percent. South Africa already has the distinction of being among the top global greenhouse gas emitters per capita. The Kusile project area already exceeds permitted ambient levels of hazardous air pollutants that create soot and smog, which cause harm to respiratory, cardiovascular and nervous systems, leading to heart disease, cancer, stroke and chronic lower respiratory diseases, according to Physicians for Social Responsibility. If completed, Kusile will increase the cost of electricity for the poor and household consumers to compensate for Apartheid-era "special pricing agreements" that give large industrial users, which consume most of South Africa's electricity, guaranteed rates that are among the lowest in the world. The cost of Kusile, which in 2007 was estimated by Eskom to be 80 billion rand, had more than doubled to 172 billion rand by 2016. It is "expected to further strain Eskom's financial resources, and place upward pressure on Eskom's electricity price trajectory in the years ahead." In 2015 the U.S. Securities and Exchange Commission charged Hitachi with violations of the Foreign Corrupt Practices Act in connection with contracts to build Kusile and Medupi (another enormous coal plant in South Africa), resulting in a $19 million settlement.

Long Phu-1 Coal Plant (Vietnam):

MUFG and JP Morgan Chase — among the lead financial arrangers, with potential combined $650 million in finance

Long Phu-1 in Vietnam would emit an estimated 6.3 million tonnes of CO2 per year. As a "supercritical" coal power plant, Long Phu-1 is prohibited from being financed by most official government export credit agencies (ECA), including the U.S. Export-Import Bank. However, the former director of the EPA's Air Enforcement Division, Bruce Buckheit, revealed that the project consulting firm Environmental Resources Management doctored the coal plant's greenhouse gas emissions estimates to make Long Phu-1 appear to be a more efficient "ultra-supercritical" plant, which would be allowed under ECA coal financing restrictions. Analysis of Long Phu-1 by Friends of the Earth U.S. reveals that the project violates other international policies, including requirements to analyze alternatives, identify cumulative and associated risks and impacts, evaluate labor and working conditions, prevent pollution, protect community health, provide safety and security, and ensure biodiversity conservation. In February 2018, the New York Times reported that U.S. Export-Import Bank financing for Long Phu-1 had collapsed after it was revealed that project financiers included Vnesheconombank, a Russian bank that is on the U.S. government's sanctions list and is part of a federal investigation into possible collusion between the Russian government and the Trump presidential campaign. It was also reported that a top Long Phu-1 project official had been sentenced to prison for corruption. MUFG and JP Morgan Chase, like the U.S. Export-Import Bank, must also comply with U.S. sanctions. However, it remains unclear whether these banks continue to be potential financiers of Long Phu-1.

nomi prins 12/17 AN

https://www.alternet.org/economy/next-financial-crisis-will-be-worse-last-one

...On the flip side of that euphoria however, is the fact that the median wage rose just 2.4 percent and has remained effectively stagnant relative to inflation. And although the unemployment rate fell to a 17-year low of 4.1 percent, the labor force participation rate dropped to 62.7 percent, its lowest level in nearly four decades—particularly difficult for new entrants to the workforce, such as students graduating under a $1.3 trillion pile of unrepayable or very challenging student loan debt. (Not to worry though: Goldman Sachs is on that, promoting a way to profit from this debt by stuffing it into other assets and selling those off to investors, a la shades of the subprime mortgage crisis.)

Those of us living in the actual world without billionaire family pedigrees possess a healthy dose of skepticism over the “Make America Great Again” sect that believes Trump has transformed America “hugely,” for record-setting markets don’t imply economic stability, nor do 40 percent corporate tax cuts translate into 40 percent wage growth. We can march forward into 2018 carrying that knowledge with us.

But first, a recap. For the U.S. financial system, 2017 was marked by five main themes: The GOP’s “You All Just Got a Lot Richer” Corporate Tax Reduction Plan; Big Banks Still Bad; The Fed’s Minor Policy Shift; Debt; and Deregulators Appointed to Positions of Regulatory Authority.

Banks Are Still Big and Bad

The Big Six banks have paid billions of dollars in settlements for a variety of frauds committed before and since the 2007-2008 financial crisis, but that didn’t keep them from tallying up new fines in 2017. The nation’s largest bank, JPMorgan Chase, agreed to pay $53 million in fines for scamming African-American and Latino mortgage borrowers with disproportionately higher rates than for white borrowers. The Consumer Financial Protection Bureau fined Citigroup $28.8 million for not disclosing foreclosure-avoiding actions. Bank of America got fined $45 million for its foul treatment of a California couple trying to save their home.

But the Big Six bank that received the most attention in 2017, as it did in 2016, was Wells Fargo. The number of people affected by its fake-account creation scandal grew from 2 million reported in 2016 to about 3.5 million. That increase resulted in Wells Fargo expanding its associated class-action settlement to $142 million.

Wells Fargo was mired in smaller scandals, too. For instance, it charged 800,000 customers for auto insurance they didn’t need, raised mortgage rates for certain customers without properly disclosing it was going to, and made a bunch of unauthorized adjustments to people’s mortgages.

No Glass-Steagall Reinstatement, More Deregulation

The idea of reinstating the Glass-Steagall Act of 1933 featured in both the Democratic and the Republican National Committees’ platforms during the campaign season. But Trump’s treasury secretary, Steven Mnuchin, made it clear multiple times there would be no such push from the administration, arguing against doing so before senators including Elizabeth Warren and Bernie Sanders.

To emphasize his disdain for regulation and oversight, Mnuchin also pushed the Financial Stability Oversight Council, over which he presides, to vote 6 to 3 to rescind American International Group’s designation as posing a potential threat to the U.S. financial system. Thus, AIG will no longer be paying penance for its role at the epicenter of the last financial crisis by filing regular risk reports anymore. Federal Reserve Chair Janet Yellen also supported the move.

...

https://www.ecowatch.com/banks-tar-sands-paris-agreement-2505848938.html

At the start of next week, the United Nations Framework Convention on Climate Change, the U.N.'s negotiating body on climate change, will meet in Germany to discuss next steps after the historic agreement by 195 countries to curb global climate change to 1.5° Celsius, or 2° at most—an agreement whose only logical conclusion is that the world cannot afford expansion of the fossil fuel industry.

Various players in the financial industry have talked a big game on their commitments to the Paris agreement. But their business practices prove otherwise.

According to the new report Funding Tar Sands: Private Banks vs. the Paris Climate Agreement, in the first three quarters of 2017, major international banks have financed the extraction and transportation of tar sands at levels one and a half times higher than in the whole of 2016.

How can it be that in the last nine months, $32 billion has gone to an extreme fossil fuel whose development is flatly incompatible with meeting the goals of the Paris agreement?

Moreover, banks continue to stand behind their clients whose proposed tar sands projects, from Teck Resources' Frontier open-pit mine, to Enbridge's Line 3 pipeline, would further damn our climate and infringe upon indigenous rights.

When President Trump announced he would pull the U.S. out of the Paris agreement, he drew a line: the Paris agreement's goal of limiting climate change to 1.5°C on one side, and his administration on the other.

On what side of the line do banks fall? Jamie Dimon, CEO of JPMorgan Chase, said, "I absolutely disagree with the administration on this issue." And yet, JPMorgan Chase has increased its financing for tar sands this year, banking on major companies as they acquire new tar sands assets. Meanwhile, the bank's policy grade comes in at a disappointing D+. JPMorgan Chase's actions declare its support not for the Paris agreement and the world's desperate need to stymie climate change, but rather for the Trump administration's pro-fossil fuel agenda.

Financial institutions have shown that they are able to make significant steps toward aligning their businesses with the goals of the Paris agreement. Three weeks ago, BNP Paribas published a new policy restricting its financing for tar sands oil, among other extreme fossil fuels, in a move that the Wall Street Journal called "one of the clearest signs yet the banking industry is re-evaluating its relationship with the oil sector."

It's a relationship that direly needs reevaluation. Banks can't keep funding business as usual expansion of fossil fuels, especially when it comes to the carbon bomb that is the tar sands.

Like it or not, we can't meet the goals of the Paris agreement without the financial industry on board, especially as governments like Trump's loosen the reins on the fossil fuel industry. Banks must take the immediate step of exiting the tar sands sector. Independent of governments, these major multinational institutions must say they're on board with the Paris agreement—and then prove it.

big win gop: pence tie break

Senate voted Tuesday night to kill a controversial rule that would have allowed Americans to file class-action suits against banks instead of being forced in many cases into private arbitration.

The move by the Senate followed a similar action by the House in July to rescind the rule. President Trump is expected to sign the repeal legislation, providing a major victory for the financial industry.

Vice President Mike Pence cast the deciding vote after the Senate tied 50-50. All but two Republicans — John Kennedy of Louisiana and Lindsey Graham of South Carolina — voted to repeal the rule. No Democrats or independents supported the move.

The White House said Trump “applauds” Congress for voting to repeal the rule, which would have given consumers “fewer options for quickly and efficiently resolving financial disputes.”

The rule was unveiled in July by the Consumer Financial Protection Bureau and praised by Democrats and consumer advocates as giving average people more power to fight industry abuses, such as Wells Fargo & Co.’s creation of millions of unauthorized accounts.

But banking lobbyists argued that the rule would unleash a flood of class-action lawsuits, and that the cost of fighting those suits would be passed on to consumers. Republicans quickly moved to repeal the regulation.

“The entire purpose of this rule is to promote class-action litigation and stop arbitration resolution when there is a dispute,” said Sen. Mike Crapo (R-Idaho).

The U.S. Chamber of Commerce praised the repeal vote, saying the rule “would have benefited the class-action trial bar at the expense of American consumers and businesses alike.”

Set to take effect in March, the rule would not have banned clauses in checking account, credit card and other banking agreements that say disputes between companies and customers must be dealt with privately or in small claims court.

Instead, there would have been a ban on provisions that block consumers from banding together to bring class-action cases. The CFPB argued that such cases help hold banks accountable.

The determinations of an arbitrator are binding and consumer advocates say most decisions favor the company. The private proceedings also allow banks to deal with individual problems quietly rather than address widespread abuses.

Bureau Director Richard Cordray called the Senate vote “a giant setback for every consumer in this country” and urged Trump to veto the repeal legislation.

“It robs consumers of their most effective legal tool against corporate wrongdoing,” Cordray said. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”

...

Bank of England Warns of Huge Financial Risk from Fossil Fuel Investments (Guardian)

3/15

http://en.wikipedia.org/wiki/BB%26T

http://www.propublica.org/thetrade/item/the-big-bank-backlash-begins

...Last week, I visited an alternate universe. The real world sees a pandemic of bank misconduct, but to the white-collar defense lawyers of Washington, the banks are the victims as they bow beneath the weight of regulators' remarkably harsh punishments.

I was attending the Securities Enforcement Forum, a gathering of top regulators and white-collar defense worthies. The marquee section was a panel that included Andrew Ceresney, the current S.E.C. enforcement director, and five of his predecessors. Four of those former S.E.C. officials represent corporations at prominent white-collar law firms: Robert S. Khuzami, President Obama's first enforcement director who now plies his trade at Kirkland & Ellis; Linda Chatman Thomsen, who served at the George W. Bush-era S.E.C. and now works for Davis Polk & Wardwell; William R. McLucas, the longest-serving agency enforcement director who is now at WilmerHale; and George S. Canellos, who just left the Obama S.E.C. to work for Milbank Tweed. (The well-known Stanley Sporkin, who served in the agency in the 1970s, rounded the panel out.)...

hightower

Who loves Wall Street banksters? Okay, presumably their mommas do. Also the Republican leadership loves them, as do the fawning Democratic tandem of Tim Geithner and Sen. Chuck Schumer.

But that's it. The general public (from red-faced tea partiers to Green party activists) loathes these irredeemable paragons of selfishness. Wall Street greedsters crashed our economy, sopped up some $13 trillion in public bailout funds, immediately went back to their old destructive games of casino speculation, and rewarded themselves this year with billions of dollars in bonuses--while workers, Main Street businesses, homeowners, and the middle class continue to sink. What's to love?

Most Americans would cheer themselves hoarse to see those who caused this economic mayhem tarred and feathered (or at least fired), and to see Wall Street's financial fiefdoms broken up, decentralized, and tightly regulated. These bankers should be treated as pariahs in Washington, and sweeping financial reform should have been the easiest and quickest task on Congress's to-do list.

But no. Two years have passed since Wall Street's house of cards started falling, beginning with the ominous collapse of Bear Stearns in March 2008, yet only now are the feeblest of reforms plopping out of the legislative grinder. Far from pariahs, the CEOs and lobbyists for Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley, et al. are still being glad-handed and back-slapped by beaming officials of both parties. A diamond-level example: Jamie Dimon, honcho of JPMorgan, is a top contributor to Obama, consults regularly with him, counts Geithner as a close personal friend, is being wined and dined by GOP House leader John Boehner for campaign funds, and is likely to be named the next Treasury secretary by Obama.

Why this hugfest for such an unworthy group? Money.

No other interest group tops the finance sector in laying out cash for lobbying and campaign donations. In the last 10 years, this industry spent $4 billion on lobbyists! Consequently, in this same period, Wall Street won deregulation fights that allowed the big banks to shift from providing financial services for America to creating credit-default swaps, subprime-loan derivatives, and other gambling exotica that enriched global speculators and the bankers themselves.

After the 2008 crash and bailout, Wall Street expanded its lobbying army in 2009 in a prodigious effort to fend off regulation, restructuring, and consumer-protection proposals. Of the 11,000 corporate lobbyists presently in Washington, about 3,000 are toiling for the Street. Here's a snapshot of the 2009 lobbying presence of just three of the financial fiefdoms, as compiled by the Center for Responsive Politics (http://www.opensecrets.org/lobby):

GOLDMAN SACHS: Had 5 in-house lobbyists. Hired 14 K-Street firms to provide 44 other lobbyists, including former Reps. Dick Gephardt and Harold Ford. Spent $2,830,000.

JPMORGAN CHASE: Had 10 in-house lobbyists. Hired 10 K-Street firms to provide 26 other lobbyists. Spent $6,170,000.

CITIGROUP: Had 9 in-house lobbyists, including Nicholas Calio, the former head of legislative affairs for both George H.W. Bush and George W. Hired 10 K-Street firms to provide 60 other lobbyists. Spent $5,560,000.

According to official lobbying reports, the legislative reforms that these three gangs of hired guns were dispatched to kill (or severely wound) included the Anti-Predatory Lending Act, Assistance For Unemployed Workers and Struggling Families Act, Cap Executive Officer Pay Act, Compensation Fairness Act, Comprehensive Derivatives Regulations Act, Consumer Financial Protection Agency Act, Consumer Overdraft Protection Fair Practice Act, Credit Card Accountability Responsibility and Disclosure Act, Credit Card Fair Fee Act, Credit Cardholders' Bill of Rights, Derivatives Market Transparency and Accountability Act, Derivatives Trading Integrity Act, FAIR Overdraft Coverage Act, GREED Act, Helping Families Save Their Homes Act, Homeowner Protection and Wall Street Accountability Act, Mortgage Reform Act, Overdraft Protection Act, Ownership Through Counseling Act, Shareholder Bill of Rights, Shareholder Empowerment Act, Student Aid and Fiscal Responsibility Act, Student Credit Card Protection Act, TARP Reform and Accountability Act, Transparency In Rating Agencies Act, and Wall Street Reform and Consumer Protection Act.

In short, the bankers opposed anything that would keep them from doing everything they had been doing.

Last April, Sen. Dick Durbin was stunned to see his Helping Families Save Their Homes Act defeated by a stealth lobbying campaign led by Bank of America, JPMorgan Chase, and Wells Fargo. Disgusted, Durbin declared, "The banks--hard to believe in a time when we're facing a banking crisis that many of the banks created--are still the most powerful lobby on Capitol Hill. And they frankly own the place."

A year later, Durbin's assessment has been confirmed by the milquetoast Wall Street reform bill that recently limped out of the Senate Banking Committee. Written by Sen. Chris Dodd (whose top career funder, by far, just happens to be the finance sector--including hundreds of thousands of dollars each from Citigroup, Goldman Sachs, Morgan Stanley, and other Wall Street powers), the bill rearranges a number of regulatory chairs, subjects some of the riskier casino games to federal monitoring, and helps restrict (but not eliminate) the "too big to fail" syndrome that leads to massive taxpayer bailouts.

However, consumer advocates and populist reformers are frowning and bank lobbyists are smiling and winking, for the regulatory changes will be about as effective as a Jello doorstop when it comes to ending Wall Street's ability to abuse the public trust and serve its own enrichment at the expense of our country's real economy. Hoping to win support from a few Republican senators and to mitigate banker opposition, Dodd simply gave up too much. From the start, he refused even to consider proposals to restructure and decentralize America's financial system--thus wasting a once-in-a-lifetime, historic opportunity for fundamental change.

Instead, Dodd's bill, now embraced by the White House, gives us a patchwork of new regu-lations (which bank lobbyists will soon turn into Swiss cheese, riddled with loopholes). And, in a fatal concession to Wall Street lobbyists, he places most of the regulatory authority in the gentle grasp of the most banker-friendly agency of all, the Federal Reserve. Even the new Consumer Financial Protection Agency is to be in the Fed, which is akin to moving the hen house into the foxes' den.

However, nothing exemplifies the meekness of this bill more than its gesture toward restricting the obscene pay levels that the Princes of Wall Street bestow on themselves. This self-aggrandizement is especially offensive to workaday Americans, and Obama himself made a lot of noise against it. So, what does the bill actually do to stop it? A provision allows shareholders to vote on executive pay. That could be effective--except that these are to be non-binding votes! CEOs can simply ignore them, just as they routinely ignore other shareholder opinions.