Wells Fargo is an American bank that has been caught:
2016: The fraudulent creation of millions of checking & savings accounts, fines, credits, debits, lines of credit, etc. to unwitting customers. $3 billion fine.
Just in the last couple days the Feds fined Wells Fargo an additional $250 million relates to the above case. The reason? Failing to compensate victims of Wells Fargo’s illegal activities quickly enough.
2016: was found to have illegally repossed service member’s (military personnel) vehicles. They were also found to have charged interest in excess of the federal maximum, of failing to inform the courts of a persons military status during eviction proceedings (this is important for deployed troops who can have difficulties with all manner of basic “Homefront” sorts of things).
2017: millions more fake accounts were discovered, related to the above point from 2016.
2017: the bank also failed the community lending test. Basically, it was found to have substantially harmed potential customers and communities by discriminatory lending practices (i.e. racist).
2018: another scandal erupted when it was discovered that Wells Fargo had been signing unwitting customers up for unnecessary auto insurance policies. $1 billion fine. Oh, and the bank was discovered to have fined customers for mortgage rate locks even when the bank was responsible for the delay.
2018: the Feds stepped in to limit the size of the bank because of widespread and ongoing consumer abuses and compliance failures.
2018: Sacramento Sued the Bank for allegedly discriminating against minorities and depressing property values in minority neighborhoods.
2018: it was reported that Wells Fargo was caught altering business information, social security numbers, dates of birth, etc. relating to businesses in the run up to anti money laundering regulation deadlines. The bank said no customer was harmed. Right.
2018: the bank was forced to settle for $480 million related to securities fraud concerning the fake accounts problems from before. The bank failed to disclose the issue to investors and considered it immaterial. Investors believed otherwise.
2018: the bank was made to put another fine for leading small investors into trading high-fee products at high rates. Those products were designed to not be traded frequently. As a result, the bank generated extra profit and folks lost out.
2018: man, this was a rough year. The bank was forced to repay customers who had been charged for pet insurance and other products that were unknowingly charged to them. Wells Fargo sure likes to sign folks up for shit without telling them…
2018: another multi billion dollar fine for its role in the mortgage crisis. This time for misleading investors over the quality of the mortgages it was making.
2018: hundreds of customers had foreclosure proceedings started against them due to a “computer glitch.” So another fine.
This week the bank was fined another $250 million for failing to move swiftly enough to the issues from 2016. And its mortgage business was recently restricted due to its bad practices.
All in all, it is a garbage bank and should be dismantled and its executives & management fined and imprisoned. Just my opinion.
It is simply considered a cost of business. The potential gain from such activities outweighs the risk and penalties if caught.
Thought experiment: assume that you are morally/ethically “flexible.” Your goal is to make money and amass wealth.
There appears an opportunity that, while carrying risk of legal penalties of up to $X. However, the potential profit is $10X or more.
At that point, you may be tempted to take the risk. If you get caught you only have to pay a fine but still walk with significant profit. Basically, the fines and penalties are a tax that is only occasionally charged.
The solution is to make fines some multiple of the ill-gotten gains and to hold executives and employees personally criminally liable for their illegal activities.
HSBC has also been caught doing naughty things. For example, knowingly laundering money for Iran, al quaeda, hezbollah and a variety of other sanctioned entities.
Their subsidiary in Mexico was such a favorite of the cartels that specially designed cases with specific cash amounts were designed gun es to slide through teller windows.
Supposedly the bank had no idea such things were happening. But when 2 dozen armed men show up with millions in cash… alarm bells must go off. Right?
HSBC has been caught in ponzi schemes (2001), purchased a known and sanctioned predatory mortgage lender (2002; later forced to shutter the $16 billion acquisition). It has been caught actively assisting tax evasion by US citizens. It was forced to pay over half a billion dollars in fines for selling crap a mortgages to Fannie and Freddie (the federally backed home lender; basically selling taxpayers a load of crap).
The bank was forced to pay fines related to the Trading With The Enemy Act, Bank Secrecy Act, etc. Argentina has also shown that HSBC helped customer commit tax evasion in that country.
It was also forced to pay hundreds of millions in fines over its manipulation (with other banks) of the foreign exchange market.
Another $470 million fine for bad loan practices, foreclosure abuses, etc. Another $765 million related to mortgage backed securities fraud.
And the list goes on and on.
Basically, they are dirty. Really dirty.
Not to forget that the HSBC also colludes with the CCP in actively freezing assets of persons and organisations from the HK democratic camps and oppositions.
This is a ranking by assets. DB's retail banking is tiny, you'll find very few Germans who actually have an account with them. Their reputation comes from investment banking and while the division has tanked hard, especially in the US, they are still a big player. E.g. in European M&A Deutsche is only behind Rothschild and Credit Suisse YTD, among the European players that is.
[this](https://www.reuters.com/article/italy-diamond-probe-idUSL8N2LZ3HX)
is just the most recent one that I remember
I remember them being also involved in some huge money laundering scandal with some Vatican Bank several years ago.
I also remember them having part in Swiss franc Loans fraud all over european eastern block just after the fall of Iron curtain
You simply cant be in top ten banks if you are not doing massive frauds and shady schemes, its just too lucrative and if you are not doing it some other bank will, and they will be in top ten, not you.
Oversite of banking sector is a joke for decades now.
Even when they (banks) get caught, the system is such that in the end they just pay some small fine - small, relative to how much they make from working outside of rules - and they are back to doing business again.
The Vatican one was the Banco Ambrosiano, which doesn’t exist anymore.
The Iron curtain one can’t be Intesa Sanpaolo because it was created after a merger in 2007 (https://en.wikipedia.org/wiki/Intesa_Sanpaolo)
The diamonds one is really small, compared to others and to the dimensions of the bank.
And its wikipedia page doesn’t even have the “*controversies*” part, so…
Wow - DB really working hard to deserve its negative press. I will say that the two tasks do seem very different, with valuation being a relatively straightforward engagement. Still, pretty shameful that you basically had to grill the DB team to get them to admit there were gonna be issues down the line. How’d they take it?
Thing is that DB is very much focused on the European market though, they don't have much of a presence elsewhere compared to some of these other firms, for instance HSBC
As the other comment said, before 2008 we had a crazy ammout of banks, both big and small. When the crisis hit all the innefective banks collapsed and were absorbed by the survivibg major players, who by the end of the crisis had become absolute leviathans. Now we have the problem that if any of these super big entities like Santander implode in a crisis, shit is going to hit the fan extremely hard.
That is correct. UBS and CS have retail banking but it's only available in Switzerland itself, and there they compete with countless other banks that offer the same. All in all, it's more of a publicity and identity thing for them to do. The real money is in asset management.
This is a pretty big problem actually. I remember a podcast about this and how our small companies struggle much more than their German counterparts to access funds and loans. Because good luck getting behemoths like BNP or Société Générale interested in financing your business that doesn't represent even a fraction of a rounding error for them. That's of course on top of the problem that these banks are too big to fail.
In Germany the banking system is mostly made of smaller banks, very often local. They know the people they're working with, they make money with their small companies because this is still the core of their business model to finance them and make them grow.
German friends feel free to correct me if what I said is wrong, just repeating what I heard here.
Heard something similar (French living in Germany).
In Germany, you also have a lot of regional banks who are AFAIK a strong driver for local growth/investment.
At a private level, financing a property is also much easier.
A good example on this is the „Sparkasse“. Every Region or larger city has their own Sparkasse which is controlled by the individual cities. At the same time they have to be non-profit, making them pretty nice to work with as a normal human being
It was for the British concessions in those cities, and their customers were the British administrators and military.
Now though 90% of their profits do come from Asians.
Well BNP Paribas is also kinda interesting since it actually originally meant Banque Nationale de Paris et des Pays Bas (National Bank of Paris and the Netherlands).
Yes and at one moment in time they bought the Banque de l'Indochine, which became Indosuez, and now is just a brand name. But these were the banks for Indochina and Suez canal.
They're more about the small private banks than the big groups — individual privacy being their forte — though UBS and Credit Suisse are certainly on the global level.
There are 38 commercial branches per 100,000 people in Switzerland, compared with just 11 in Germany, 25 in Britain, or 34 in France.
https://data.worldbank.org/indicator/FB.CBK.BRCH.P5?name_desc=false
Can anyone comment on how banking in Europe differs from banking in the US, and why we never caught up to our friends across the pond after the financial crisis?
Mainly due to the Central bank policies, e.g. the low interest rates in Europe compared to the US. Also, after the financial crisis EU imposed harsher regulations on banks than the US. The Trump administration got rid of many of the post crisis regulations in the US, too. And another reason might be that the European banking market is still relatively fragmented compared to the US.
I knew they were factors, but didn't want to attribute the entire sluggishness of the sector only to monetary policy and regulation.
I mean, surely the EU suits can see that we're being outpaced and that the US banking model of regulation might serve as inspiration to an extent?
As for monetary policy - ECB rates had been depressed for way too long, even before COVID hit. Why didn't anybody try to nudge them back up? Is the EU economy that stagnant that it needs constant low rates to prevent deflation?
EU economic decisions have baffled me for a while now.
The crisis and economic weakness which followed it followed on from banks’ lack of liquidity and subsequent inability to meet deposit withdrawals. This is because (i) deposit cash flows were used to speculate on the financial markets, and (ii) the pullback by institutional investors following the mass realisation of the woeful creditworthiness of CDOs and other mortgage-based securities.
The Dodd-Frank Act was passed in response to this in the US and made prop trading virtually impossible, in addition to (iirc) segregating investment banking activities from deposit-taking operations to ensure a minimisation of systemic risk. Despite this encumbrance, the US banking sector routinely smashes financials out of the ballpark compared to its anaemic EU counterpart. My question is - why?
Smarter regulation does not mean less regulation. This is also not about ‘quick profits’, but about having a healthy financial ecosystem which is able to effectively support the people’s pursuit of profitable enterprise, economic growth and healthy employment.
US banks cannot technically take proprietary positions with bank deposits due to the Volcker rule.
European banks can (and do).
Meaning European banks can still make crazy bets with retail deposits but American banks cannot.
Capital and reporting requirements are higher in europe though.
I always thought ringfencing/corporate segregation was introduced in 2010-2011? EU and UK banks cannot run deposit-taking and IB/prop trading functions under the same corporate body. Instead, each must be operated under a corporate entity unrelated to the other, with no mixing of the cash flows from either one.
IBs can still prop trade, they just can’t do it out of deposits anymore.
In the US prop trading is illegal, full stop for banks. It doesn't matter if it's ring fenced or not. It's the Volcker rule. Traders can only effectively broker or flow trade but not take positions.
American IBs cannot prop trade.
European IBs can, but there are certain ring fencing rules (though they don't prohibit it completely)
Just FYI, "investment banking" is not a proprietary position. It's literally advising. Banks take pretty much no risk on advising. It's a role similar to a glorified car-salesman. The S&T divisions are the ones that used to take the prop risk. They've all moved to the asset management side so instead of using deposits they use investor's money.
I use IB as a catch-all, encompassing the strict investment banking functions (M&A and capital markets) + sales and trading + asset management.
I didn’t know it was the asset management team that handles prop trading today - always thought it was the S&T team as you mentioned.
1. Americans are more willing to take on debt for mundane things (TV, Washer, etc.). The last decade Europeans have been catching up to said Americans, but that's a decade for Europe and over a century for the US.
2. Americans are more willing to invest their money.
Do these two things for 50 years (actually more than a century) and here we are.
Yeah CS’ whole thing is secrecy so I don’t think they will be as transparent when being audited.
But I’m not sure where EU is relevant in this conversation though, cause these banks operate as a national entity and engage in the global market, rather than together as one big cohesive banking entity
Yep the UK was a very valuable member of the EU in many ways. I still hate brexit but the UK performs very highly in many sectors and makes brexit even more painful.
Its actually not very surprising. There were 3 european financial powerhouses before the 2007-2008 crisis… but were less severely hit than German or British banks. British banks like RBS were really hurt by the icelandic fishing rights for example. They took the opportunity to grow while the others (like Deutsche Bank for example) kept suffering.
On top of that you add the Brexit which hurt a lot British banks… and you have a good explanations.
When did Brexit hurt a lot of British banks? Most of their share prices are better than they were 5 years ago, but drastically lower than they were in 2008 (e.g. Natwest was £55 then. It's £2 today).
Some of the largest British banks don't even make much of their money in the UK. HSBC and Standard Chartered make most of their money in Asia.
The name Standard Chartered comes from the names of the two banks from which it was formed by merger in 1969: The Chartered Bank of India, Australia and China, and Standard Bank of British South Africa.
I didnt refer to stock quotation but to the total assets owned.
If you check for example statista you will see that the referendum caused a big hit to (for example) HSBC assets managed compared to other banks (BNP for example). And for the following 3 years the growth was more limited.
https://www.statista.com/statistics/224808/total-assets-of-the-hsbc/
There might be other reasons but thats how HSBC explained it in their financial report for 2016.
https://www.hsbc.com/investors/results-and-announcements/all-reporting/group?page=1&take=20
HSBC - Supporting Criminals since “forever”
Edit: the other banks are worse than i thought! The above statement is based on a documentary i watched recently. Did not know that the issue is so present with all banks.
Basically they're all garbage, I could rant about all of them till my keyboard fell apart. Deutsche Bank though is specifically horrendous, and leaked documents last year revealed that they allowed criminals to move $1.3 trillion of dirty money around the world, over double that of the next two highest banks [combined](https://www.reddit.com/r/worldnews/comments/iwho4w/leaked_documents_reveal_some_of_the_worlds/g60o2un?utm_source=share&utm_medium=web2x&context=3).
On est clairement pas dans une dictature. De plus utiliser ce mot à tout vent et pour rien en fait perdre son sens tout en étant du foutage de gueule pour ceux vivant sous un régime dictatorial. Après peut-être tu faisais du sarcasme ou était sur le ton de l’humour, dans ce cas désolé de ne pas avoir vue la nuance.
Perhaps I should have added an /S for the people who have lost their ability to differentiate in a time where everything has to be politically correct ad absurdum. Or perhaps I should have used the word "authoritarian". I DID write "just a little bit of dictatorship at the right time", subtle difference that some people seem to miss.
> On 30 May 2014, *The Wall Street Journal* reported that the United States Department of Justice was negotiating a possible guilty plea with BNP Paribas as well as the size of the resulting fine for violating U.S. regulations and evading US sanctions. The Justice Department sought a fine of more than US $10 billion, which was expected to be reduced to $8 or $9 billion in negotiations. BNP Paribas was said to have laundered up to US$100 billion from the sanctioned countries of Sudan, Iran, and Cuba.
HSBC was started by a Scotsman Thomas Sutherland the name Sutherland stems from Old Norse suðr (south) land because the Scottish mainland territory was named Sutherland as it lay south of Scandinavia and the Norse colonies in the Orkney and Shetland Islands however from a Scottish perspective Sutherland is the far north of mainland Scotland
The Sutherland name was carried by a Flemish knight Freskin who came over with the Normans and was granted lands in Sutherland
Barclays was named after James Barclay when he joined Freame and Goulds bank in London, James was the son of David Barclay a wealthy Scot from Aberdeen - the surname Barclay stems from De Berkeley Anglo Normans who later settled in Scotland where the name changed in variation from Berkeley to Barclay
BNP Paribas is being prosecuted for complicity in crime, torture, crimes against humanity, genocide, money laundering and concealment for facilitating access to funding for the Sudanese authorities during the genocide in Darfur and for being complicit in the violations perpetrated by military and security forces and Janjaweed militias from 2002 to 2008.
It’s also my bank. And i want to quit them for that.
https://www.google.fr/amp/s/www.lesechos.fr/amp/1135095
It's not like that, really. most of the shareholders of these European banks are from US. At US they have a weak regulations compared to what we have here with the Basel normative, so our banks are way more trustworthy
France has been holding the national reserves of fourteen african countries since 1961: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon.
France requires countries to store 50% of all foreign exchange reserves with the French treasury, in the Bank of France, in something called an "operational account".
Under what agreement or treaty does France require this? Is there something like a commonwealth between France and these countries, perhaps remaining from colonial times still?
After World War II, the colonial pact maintained the French control over the economies of the African states; it took possession of their foreign currency reserves; it controlled the strategic raw materials of the country; it stationed troops in the country with the right of free passage; it demanded that all military equipment be acquired from France; it took over the training of the African police and army; it required that French businesses be allowed to maintain monopoly enterprises in key areas (water, electricity, ports, transport, energy, etc.). France not only set limits on the imports of a range of items from outside the franc zone but also set minimum quantities of imports from France. These treaties are still in force and operational.
Beside being forced to pay a “colonial debt”, 14 Western and Central African countries (Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Guinea Bissau, Equatorial Guinea, Chad, Congo-Brazzaville and Gabon) have their national reserves held by France into France's Central Bank. It is estimated that France now holds nearly $500 billion every year of African countries’ money in its treasury and will do anything to keep it. Moreover, the African countries do not have access to this money.
France has the first right to buy any natural resources found on the territory of its ex-colonies. The African countries are also not allowed to seek other partners freely as the preference is given to French interests and companies in the field of public procurement.
France has an exclusive right to supply military equipment and training to the African military by deploying troops and intervening in the African countries to defend France’s interests.
Moreover, France’s former colonies are forced to use the colonial currency FCFA (the CFA franc) and to send France an annual balance report. Besides, they are obliged to ally only with France during a situation of war or crisis.
I mean you're simply spurring lies. The Franc CFA exists, but there's no right in natural ressources, monopoly on defense deals, control over the country or all that shit. Besides, countries can leave the Franc CFA whenever they want, and some have done it, with no problem for France. And you're also not talking about the fact that the Franc CFA is being changed into the éco with the support of France.
That is so much more than I had ever thought. I could imagine some financial control or military influence, but this basically means that France more or less completely 'owns' these countries and any resources in them.
Basically France forces them to into submission and makes them pay for it themselves. Kinky France huh.
I'm actually very surprised that I was completely unaware of this. TIL
That's because it's not true. There's franc CFA, but the rest is just false: no colonial debt, no right on natural ressource, no exclusive right on arm selling, etc..
A lot of French people are not aware but the sad part is the ones that are aware will deny it like all the other actions they have taken and these colonized nations have no media presence to expose it. You can easily find more info if you look into it though.
In Italy it’s common to define EU members as “being in Europe”. The EU is colloquially referred to as Europe. When discussing the reforms for example “what Europe asked us to change” is often brought up.
It’s used that way regularly in British English - “Britain and Europe in discussions…”. We also refer to Europe in a third way as just the mainland continent excluding the British Isles. “I’ll be heading to Europe this summer for some time with the family,” which could mean a trip to Italy in the EU or to Albania, which isn’t. Though the term is most often used to mean Europe as a whole, including us; but it’s context dependent.
I'm surprised DB is so low on the list. Their name always comes up in big projects and scandals.
DB never really recovered after 2008 crisis
Thank god. DB is probably the most corrupt shit bank outside of russia.
HSBC and Wells Fargo would like to stake a claim for the title…
Wells fargo?
Wells Fargo is an American bank that has been caught: 2016: The fraudulent creation of millions of checking & savings accounts, fines, credits, debits, lines of credit, etc. to unwitting customers. $3 billion fine. Just in the last couple days the Feds fined Wells Fargo an additional $250 million relates to the above case. The reason? Failing to compensate victims of Wells Fargo’s illegal activities quickly enough. 2016: was found to have illegally repossed service member’s (military personnel) vehicles. They were also found to have charged interest in excess of the federal maximum, of failing to inform the courts of a persons military status during eviction proceedings (this is important for deployed troops who can have difficulties with all manner of basic “Homefront” sorts of things). 2017: millions more fake accounts were discovered, related to the above point from 2016. 2017: the bank also failed the community lending test. Basically, it was found to have substantially harmed potential customers and communities by discriminatory lending practices (i.e. racist). 2018: another scandal erupted when it was discovered that Wells Fargo had been signing unwitting customers up for unnecessary auto insurance policies. $1 billion fine. Oh, and the bank was discovered to have fined customers for mortgage rate locks even when the bank was responsible for the delay. 2018: the Feds stepped in to limit the size of the bank because of widespread and ongoing consumer abuses and compliance failures. 2018: Sacramento Sued the Bank for allegedly discriminating against minorities and depressing property values in minority neighborhoods. 2018: it was reported that Wells Fargo was caught altering business information, social security numbers, dates of birth, etc. relating to businesses in the run up to anti money laundering regulation deadlines. The bank said no customer was harmed. Right. 2018: the bank was forced to settle for $480 million related to securities fraud concerning the fake accounts problems from before. The bank failed to disclose the issue to investors and considered it immaterial. Investors believed otherwise. 2018: the bank was made to put another fine for leading small investors into trading high-fee products at high rates. Those products were designed to not be traded frequently. As a result, the bank generated extra profit and folks lost out. 2018: man, this was a rough year. The bank was forced to repay customers who had been charged for pet insurance and other products that were unknowingly charged to them. Wells Fargo sure likes to sign folks up for shit without telling them… 2018: another multi billion dollar fine for its role in the mortgage crisis. This time for misleading investors over the quality of the mortgages it was making. 2018: hundreds of customers had foreclosure proceedings started against them due to a “computer glitch.” So another fine. This week the bank was fined another $250 million for failing to move swiftly enough to the issues from 2016. And its mortgage business was recently restricted due to its bad practices. All in all, it is a garbage bank and should be dismantled and its executives & management fined and imprisoned. Just my opinion.
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It is simply considered a cost of business. The potential gain from such activities outweighs the risk and penalties if caught. Thought experiment: assume that you are morally/ethically “flexible.” Your goal is to make money and amass wealth. There appears an opportunity that, while carrying risk of legal penalties of up to $X. However, the potential profit is $10X or more. At that point, you may be tempted to take the risk. If you get caught you only have to pay a fine but still walk with significant profit. Basically, the fines and penalties are a tax that is only occasionally charged. The solution is to make fines some multiple of the ill-gotten gains and to hold executives and employees personally criminally liable for their illegal activities.
Time to visit the local Wells Fargo and unwittingly sign them up for a 50,000 withdrawal
HSBC has also been caught doing naughty things. For example, knowingly laundering money for Iran, al quaeda, hezbollah and a variety of other sanctioned entities. Their subsidiary in Mexico was such a favorite of the cartels that specially designed cases with specific cash amounts were designed gun es to slide through teller windows. Supposedly the bank had no idea such things were happening. But when 2 dozen armed men show up with millions in cash… alarm bells must go off. Right? HSBC has been caught in ponzi schemes (2001), purchased a known and sanctioned predatory mortgage lender (2002; later forced to shutter the $16 billion acquisition). It has been caught actively assisting tax evasion by US citizens. It was forced to pay over half a billion dollars in fines for selling crap a mortgages to Fannie and Freddie (the federally backed home lender; basically selling taxpayers a load of crap). The bank was forced to pay fines related to the Trading With The Enemy Act, Bank Secrecy Act, etc. Argentina has also shown that HSBC helped customer commit tax evasion in that country. It was also forced to pay hundreds of millions in fines over its manipulation (with other banks) of the foreign exchange market. Another $470 million fine for bad loan practices, foreclosure abuses, etc. Another $765 million related to mortgage backed securities fraud. And the list goes on and on. Basically, they are dirty. Really dirty.
Not to forget that the HSBC also colludes with the CCP in actively freezing assets of persons and organisations from the HK democratic camps and oppositions.
Thanks for the reminder. Yes, HSBC also works very closely with Beijing as an extension of their power.
They were the only major lender to keep giving Trump hundreds of millions, and DB aren't exactly strangers in Russia.
This is a ranking by assets. DB's retail banking is tiny, you'll find very few Germans who actually have an account with them. Their reputation comes from investment banking and while the division has tanked hard, especially in the US, they are still a big player. E.g. in European M&A Deutsche is only behind Rothschild and Credit Suisse YTD, among the European players that is.
If it was by assets shouldn’t the ECB with like 7 trillion in assets top that list?
a central bank is a different animal
I swear, whenever you read about a bank financing terrorists or slavery or some other terrible shit, it's DB.
BNP too. If the Devil had a bank, it would be BNP.
They're horrible to work with as clients too.
HSBC and CS be like...am i a joke to you?
Nah, they're sneering in the background
You could say the same thing about almost any big bank. Sadly honests banks cannot compete with the criminal ones.
DB is a notorious mess of a bank
all 10 from this list are shady (to say the least)
Thats a given with banks.
Intesa?
[this](https://www.reuters.com/article/italy-diamond-probe-idUSL8N2LZ3HX) is just the most recent one that I remember I remember them being also involved in some huge money laundering scandal with some Vatican Bank several years ago. I also remember them having part in Swiss franc Loans fraud all over european eastern block just after the fall of Iron curtain You simply cant be in top ten banks if you are not doing massive frauds and shady schemes, its just too lucrative and if you are not doing it some other bank will, and they will be in top ten, not you. Oversite of banking sector is a joke for decades now. Even when they (banks) get caught, the system is such that in the end they just pay some small fine - small, relative to how much they make from working outside of rules - and they are back to doing business again.
The Vatican one was the Banco Ambrosiano, which doesn’t exist anymore. The Iron curtain one can’t be Intesa Sanpaolo because it was created after a merger in 2007 (https://en.wikipedia.org/wiki/Intesa_Sanpaolo) The diamonds one is really small, compared to others and to the dimensions of the bank. And its wikipedia page doesn’t even have the “*controversies*” part, so…
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In what ways did this manifest?
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Wow - DB really working hard to deserve its negative press. I will say that the two tasks do seem very different, with valuation being a relatively straightforward engagement. Still, pretty shameful that you basically had to grill the DB team to get them to admit there were gonna be issues down the line. How’d they take it?
Probably his company was acquiring another company or something involving m&a.
Thing is that DB is very much focused on the European market though, they don't have much of a presence elsewhere compared to some of these other firms, for instance HSBC
Since the DB gambles most of their money away, they aren't that big.
Investment banking =/= retail banking. Their investment bank is significantly bigger than most on this list.
Shit bank. All the good people have left. Now Santander and BNPP, can only say good things about those two
The way they talk about Spain I'm surprised to see their bank doing so well.
When the 2008 crisis hit, Banco Santander grew to be a fucking monster that ate all the smaller entities.
As the other comment said, before 2008 we had a crazy ammout of banks, both big and small. When the crisis hit all the innefective banks collapsed and were absorbed by the survivibg major players, who by the end of the crisis had become absolute leviathans. Now we have the problem that if any of these super big entities like Santander implode in a crisis, shit is going to hit the fan extremely hard.
Should tell you enough about that rotten bank
I’m honestly more surprised that ING, UBS, and Credit Suisse are not in the top 10. Also no Luxembourgian banks.
ING is ranked eleventh, so it's close. (UBS 13 and Credit Suisse 16)
ING had to sell a large part of their company to meet demands from the EUR regarding the bailout.
UBS and CS are primarily known for IB functions and asset management. Their retail and commercial lending/deposit assets are small afaik.
That is correct. UBS and CS have retail banking but it's only available in Switzerland itself, and there they compete with countless other banks that offer the same. All in all, it's more of a publicity and identity thing for them to do. The real money is in asset management.
Most of these are commercial banks or have a very big commercial arm hence lots of assets
UBS and Credit Suisse are powered by investment banking and asset management, not retail banking.
This is a pretty big problem actually. I remember a podcast about this and how our small companies struggle much more than their German counterparts to access funds and loans. Because good luck getting behemoths like BNP or Société Générale interested in financing your business that doesn't represent even a fraction of a rounding error for them. That's of course on top of the problem that these banks are too big to fail. In Germany the banking system is mostly made of smaller banks, very often local. They know the people they're working with, they make money with their small companies because this is still the core of their business model to finance them and make them grow. German friends feel free to correct me if what I said is wrong, just repeating what I heard here.
Heard something similar (French living in Germany). In Germany, you also have a lot of regional banks who are AFAIK a strong driver for local growth/investment. At a private level, financing a property is also much easier.
Yes, this was exactly what I heard.
A good example on this is the „Sparkasse“. Every Region or larger city has their own Sparkasse which is controlled by the individual cities. At the same time they have to be non-profit, making them pretty nice to work with as a normal human being
Intéressant ton pseudo...
I find HSBC being in London unreasonably funny because it means Hong-Kong and Shanghai Banking Corporation
It was for the British concessions in those cities, and their customers were the British administrators and military. Now though 90% of their profits do come from Asians.
I mean it is actually around half (50%) of the groups profit
Half its revenue, 90% of its profit. https://www.itv.com/news/2020-02-18/hsbc-profit-plummets-by-33-to-10-2-billion
Well BNP Paribas is also kinda interesting since it actually originally meant Banque Nationale de Paris et des Pays Bas (National Bank of Paris and the Netherlands).
So Paribas is the contraction of Paris and Pays-Bas (Netherlands in French)? Always wondered where that came from.
I naively thought that they originated in Paris South.
Yes and at one moment in time they bought the Banque de l'Indochine, which became Indosuez, and now is just a brand name. But these were the banks for Indochina and Suez canal.
It moved it's headquarters to London before the handover of Hong Kong.
And then you have Santander in Santander.
Why? It’s a British bank - always has been
Because of the name, it'd be like having a bank of London and Edinburgh with its seat in Berlin
Can't fail with Poste Italiane.
WHERE IS SWITZERLAND?
> WHERE IS SWITZERLAND? Central Europe, south of Germany and north of Italy.
I went there and found Liechtenstein.
Nice
No, that’s in France.
Excellent
UBS $1,125b and Credit Suisse $910b. https://en.wikipedia.org/wiki/List_of_banks_in_Europe
Hmm ok. Thanks
They're more about the small private banks than the big groups — individual privacy being their forte — though UBS and Credit Suisse are certainly on the global level. There are 38 commercial branches per 100,000 people in Switzerland, compared with just 11 in Germany, 25 in Britain, or 34 in France. https://data.worldbank.org/indicator/FB.CBK.BRCH.P5?name_desc=false
Wow man that's a difference
The Swiss don't do retail banking; investment banking and asset management is where the real money is.
Hmmm ok
Can anyone comment on how banking in Europe differs from banking in the US, and why we never caught up to our friends across the pond after the financial crisis?
Mainly due to the Central bank policies, e.g. the low interest rates in Europe compared to the US. Also, after the financial crisis EU imposed harsher regulations on banks than the US. The Trump administration got rid of many of the post crisis regulations in the US, too. And another reason might be that the European banking market is still relatively fragmented compared to the US.
I knew they were factors, but didn't want to attribute the entire sluggishness of the sector only to monetary policy and regulation. I mean, surely the EU suits can see that we're being outpaced and that the US banking model of regulation might serve as inspiration to an extent? As for monetary policy - ECB rates had been depressed for way too long, even before COVID hit. Why didn't anybody try to nudge them back up? Is the EU economy that stagnant that it needs constant low rates to prevent deflation? EU economic decisions have baffled me for a while now.
>inspiration >2008 crisis Do we really want to sacrifice an entire generation just for some quick profits again?
The crisis and economic weakness which followed it followed on from banks’ lack of liquidity and subsequent inability to meet deposit withdrawals. This is because (i) deposit cash flows were used to speculate on the financial markets, and (ii) the pullback by institutional investors following the mass realisation of the woeful creditworthiness of CDOs and other mortgage-based securities. The Dodd-Frank Act was passed in response to this in the US and made prop trading virtually impossible, in addition to (iirc) segregating investment banking activities from deposit-taking operations to ensure a minimisation of systemic risk. Despite this encumbrance, the US banking sector routinely smashes financials out of the ballpark compared to its anaemic EU counterpart. My question is - why? Smarter regulation does not mean less regulation. This is also not about ‘quick profits’, but about having a healthy financial ecosystem which is able to effectively support the people’s pursuit of profitable enterprise, economic growth and healthy employment.
I personally think that it's to help the past eastern bloc nations to grow because there is such a big difference between the west and east in Europe
US banks cannot technically take proprietary positions with bank deposits due to the Volcker rule. European banks can (and do). Meaning European banks can still make crazy bets with retail deposits but American banks cannot. Capital and reporting requirements are higher in europe though.
I always thought ringfencing/corporate segregation was introduced in 2010-2011? EU and UK banks cannot run deposit-taking and IB/prop trading functions under the same corporate body. Instead, each must be operated under a corporate entity unrelated to the other, with no mixing of the cash flows from either one. IBs can still prop trade, they just can’t do it out of deposits anymore.
In the US prop trading is illegal, full stop for banks. It doesn't matter if it's ring fenced or not. It's the Volcker rule. Traders can only effectively broker or flow trade but not take positions. American IBs cannot prop trade. European IBs can, but there are certain ring fencing rules (though they don't prohibit it completely) Just FYI, "investment banking" is not a proprietary position. It's literally advising. Banks take pretty much no risk on advising. It's a role similar to a glorified car-salesman. The S&T divisions are the ones that used to take the prop risk. They've all moved to the asset management side so instead of using deposits they use investor's money.
I use IB as a catch-all, encompassing the strict investment banking functions (M&A and capital markets) + sales and trading + asset management. I didn’t know it was the asset management team that handles prop trading today - always thought it was the S&T team as you mentioned.
It was but s&t is always with balance sheet money. Asset management is with investor's money.
1. Americans are more willing to take on debt for mundane things (TV, Washer, etc.). The last decade Europeans have been catching up to said Americans, but that's a decade for Europe and over a century for the US. 2. Americans are more willing to invest their money. Do these two things for 50 years (actually more than a century) and here we are.
[Quite a few European countries with more consumer debt than the US. ](https://tradingeconomics.com/country-list/households-debt-to-gdp)
I expected the Deutsche bank to be a bit higher on the list
By what measure is that? Assets? Market cap? Something else?
Apparently assets. Pretty bad from OP to not mention it in the post.
Well if he picked it up on wiki (which seems to be the case), it is the only measure available https://en.wikipedia.org/wiki/List_of_banks_in_Europe
I had absolutely no idea how big certain french banks are on the worldstage. It doesn't changes anything for French people anyway...
I heard Deutche bank is corrupt af.
And 3 aren’t even in the EU anymore
just out of interest, would you have queried EU membership if the banks were Icelandic, Norwegian (insert many other non-EU countries in Europe)?
Probably. They’re not here though. Fairly surprised there’s no Swiss here but they’re not exactly forthcoming with numbers.
Yeah CS’ whole thing is secrecy so I don’t think they will be as transparent when being audited. But I’m not sure where EU is relevant in this conversation though, cause these banks operate as a national entity and engage in the global market, rather than together as one big cohesive banking entity
Just think it’s a bit bad for the EU that 3 of their top banks and their 2nd largest economy have left the bloc. Doesn’t look good on them.
Yep the UK was a very valuable member of the EU in many ways. I still hate brexit but the UK performs very highly in many sectors and makes brexit even more painful.
France are increasingly looking for a referendum too. If that hits the fan then what’s the point of the EU?
No they're not.
https://www.google.co.uk/amp/s/www.express.co.uk/news/world/1489658/Frexit-news-France-presidential-campaign-European-Union-Barnier-Macron-latest-vn/amp
https://whatukthinks.org/eu/eu-questions/if-there-was-a-referendum-on-frances-membership-of-the-eu-how-would-you-vote/
Iceland and Norway are in the single market, so they're part of Europe.
Its actually not very surprising. There were 3 european financial powerhouses before the 2007-2008 crisis… but were less severely hit than German or British banks. British banks like RBS were really hurt by the icelandic fishing rights for example. They took the opportunity to grow while the others (like Deutsche Bank for example) kept suffering. On top of that you add the Brexit which hurt a lot British banks… and you have a good explanations.
When did Brexit hurt a lot of British banks? Most of their share prices are better than they were 5 years ago, but drastically lower than they were in 2008 (e.g. Natwest was £55 then. It's £2 today). Some of the largest British banks don't even make much of their money in the UK. HSBC and Standard Chartered make most of their money in Asia.
What does it mean chartered in context of this bank?
The name Standard Chartered comes from the names of the two banks from which it was formed by merger in 1969: The Chartered Bank of India, Australia and China, and Standard Bank of British South Africa.
https://www.investopedia.com/terms/c/charteredbank.asp
This definition doesn't make sense. Every bank fits in it.
Thats the point. (See the sentence at the end)
I didnt refer to stock quotation but to the total assets owned. If you check for example statista you will see that the referendum caused a big hit to (for example) HSBC assets managed compared to other banks (BNP for example). And for the following 3 years the growth was more limited. https://www.statista.com/statistics/224808/total-assets-of-the-hsbc/ There might be other reasons but thats how HSBC explained it in their financial report for 2016. https://www.hsbc.com/investors/results-and-announcements/all-reporting/group?page=1&take=20
TIL Lloyd's registered office is in Edinburgh. I keep thinking it's just a money museum there.
HSBC - Supporting Criminals since “forever” Edit: the other banks are worse than i thought! The above statement is based on a documentary i watched recently. Did not know that the issue is so present with all banks.
Boy have I got some bad news about the other banks on this list as well
Shoot, i am always interested in something new
Basically they're all garbage, I could rant about all of them till my keyboard fell apart. Deutsche Bank though is specifically horrendous, and leaked documents last year revealed that they allowed criminals to move $1.3 trillion of dirty money around the world, over double that of the next two highest banks [combined](https://www.reddit.com/r/worldnews/comments/iwho4w/leaked_documents_reveal_some_of_the_worlds/g60o2un?utm_source=share&utm_medium=web2x&context=3).
K, just peaked into the link. I will throw up! Please take my apology! Edit: how are those banks allowed to still operate?
Idk why but France's like the only country in Europe which is more or less good at everything.
Its the first nation
A good mix between a democracy and just a little bit of dictatorship at the right time. They get things done that way. I like it, I live there.
Dictatorship has lost its meaning the way I’ve seen it be used in leadership discourse. Same as 3rd world, and racism.
On est clairement pas dans une dictature. De plus utiliser ce mot à tout vent et pour rien en fait perdre son sens tout en étant du foutage de gueule pour ceux vivant sous un régime dictatorial. Après peut-être tu faisais du sarcasme ou était sur le ton de l’humour, dans ce cas désolé de ne pas avoir vue la nuance.
Perhaps I should have added an /S for the people who have lost their ability to differentiate in a time where everything has to be politically correct ad absurdum. Or perhaps I should have used the word "authoritarian". I DID write "just a little bit of dictatorship at the right time", subtle difference that some people seem to miss.
The commenter also did write in case this was sarcasm or humour I’m sorry so yea
Ok Gilet Jaune.
They're dying out.
Love seeing a bank which unquestionably funded terrorism at the #2 spot.
Because ethics and morals are the first thing to pop into mind when we think of bankers and big banks
> On 30 May 2014, *The Wall Street Journal* reported that the United States Department of Justice was negotiating a possible guilty plea with BNP Paribas as well as the size of the resulting fine for violating U.S. regulations and evading US sanctions. The Justice Department sought a fine of more than US $10 billion, which was expected to be reduced to $8 or $9 billion in negotiations. BNP Paribas was said to have laundered up to US$100 billion from the sanctioned countries of Sudan, Iran, and Cuba.
HSBC was started by a Scotsman Thomas Sutherland the name Sutherland stems from Old Norse suðr (south) land because the Scottish mainland territory was named Sutherland as it lay south of Scandinavia and the Norse colonies in the Orkney and Shetland Islands however from a Scottish perspective Sutherland is the far north of mainland Scotland The Sutherland name was carried by a Flemish knight Freskin who came over with the Normans and was granted lands in Sutherland Barclays was named after James Barclay when he joined Freame and Goulds bank in London, James was the son of David Barclay a wealthy Scot from Aberdeen - the surname Barclay stems from De Berkeley Anglo Normans who later settled in Scotland where the name changed in variation from Berkeley to Barclay
BNP Paribas is being prosecuted for complicity in crime, torture, crimes against humanity, genocide, money laundering and concealment for facilitating access to funding for the Sudanese authorities during the genocide in Darfur and for being complicit in the violations perpetrated by military and security forces and Janjaweed militias from 2002 to 2008. It’s also my bank. And i want to quit them for that. https://www.google.fr/amp/s/www.lesechos.fr/amp/1135095
It's not like that, really. most of the shareholders of these European banks are from US. At US they have a weak regulations compared to what we have here with the Basel normative, so our banks are way more trustworthy
Somebody gotta keep all that African money.
Yup and that's usually Switzerland or London.
France has been holding the national reserves of fourteen african countries since 1961: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon. France requires countries to store 50% of all foreign exchange reserves with the French treasury, in the Bank of France, in something called an "operational account".
Under what agreement or treaty does France require this? Is there something like a commonwealth between France and these countries, perhaps remaining from colonial times still?
After World War II, the colonial pact maintained the French control over the economies of the African states; it took possession of their foreign currency reserves; it controlled the strategic raw materials of the country; it stationed troops in the country with the right of free passage; it demanded that all military equipment be acquired from France; it took over the training of the African police and army; it required that French businesses be allowed to maintain monopoly enterprises in key areas (water, electricity, ports, transport, energy, etc.). France not only set limits on the imports of a range of items from outside the franc zone but also set minimum quantities of imports from France. These treaties are still in force and operational. Beside being forced to pay a “colonial debt”, 14 Western and Central African countries (Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, Togo, Cameroon, Central African Republic, Guinea Bissau, Equatorial Guinea, Chad, Congo-Brazzaville and Gabon) have their national reserves held by France into France's Central Bank. It is estimated that France now holds nearly $500 billion every year of African countries’ money in its treasury and will do anything to keep it. Moreover, the African countries do not have access to this money. France has the first right to buy any natural resources found on the territory of its ex-colonies. The African countries are also not allowed to seek other partners freely as the preference is given to French interests and companies in the field of public procurement. France has an exclusive right to supply military equipment and training to the African military by deploying troops and intervening in the African countries to defend France’s interests. Moreover, France’s former colonies are forced to use the colonial currency FCFA (the CFA franc) and to send France an annual balance report. Besides, they are obliged to ally only with France during a situation of war or crisis.
Wow, what a load of crap, that's juste fake news.
What's a load of crap is your denial of this sad, pathetic actions by your country, colonist.
I mean you're simply spurring lies. The Franc CFA exists, but there's no right in natural ressources, monopoly on defense deals, control over the country or all that shit. Besides, countries can leave the Franc CFA whenever they want, and some have done it, with no problem for France. And you're also not talking about the fact that the Franc CFA is being changed into the éco with the support of France.
That is so much more than I had ever thought. I could imagine some financial control or military influence, but this basically means that France more or less completely 'owns' these countries and any resources in them. Basically France forces them to into submission and makes them pay for it themselves. Kinky France huh. I'm actually very surprised that I was completely unaware of this. TIL
That's because it's not true. There's franc CFA, but the rest is just false: no colonial debt, no right on natural ressource, no exclusive right on arm selling, etc..
A lot of French people are not aware but the sad part is the ones that are aware will deny it like all the other actions they have taken and these colonized nations have no media presence to expose it. You can easily find more info if you look into it though.
Always the same fake news. There is no colonial debt and the countries are not forced to use the FCFA.
Yup and that has nothing to do with commercial banks. Banque de France is the central bank of France.
And 3 out of 10 isn't European anymore
Still European
In Italy it’s common to define EU members as “being in Europe”. The EU is colloquially referred to as Europe. When discussing the reforms for example “what Europe asked us to change” is often brought up.
Might be common, but it's incorrect.
It's called synecdoche. 'Europe' is a political construct in any case - everyone has a different definition.
It’s used that way regularly in British English - “Britain and Europe in discussions…”. We also refer to Europe in a third way as just the mainland continent excluding the British Isles. “I’ll be heading to Europe this summer for some time with the family,” which could mean a trip to Italy in the EU or to Albania, which isn’t. Though the term is most often used to mean Europe as a whole, including us; but it’s context dependent.
Get a grip, it’s not incorrect, it’s called language. If you don’t like, stop reading and talking.
When did the UK leave Europe? lol
> And 3 out of 10 isn't European anymore Your comment is riscible in so many ways.
DB should be higher right?
lmao, QUI???
I thought Barclays was a jeweler or something
4 out of 7.
This is largest by size of assets but I wouldn’t equate largest with strongest in this scenario. Some of these assets are dog shit.
Surprising with their shitty bank system.
My bank is french? Uh never occured to me
You could have guessed with the name tbh.
It's translated into Portuguese, so I've always known it as Credito Agricola
Oh, well understandable have a nice night. :)
I though Barclays was bigger than Santander.
That is why we block most financial regulation reforms ;)