The bank's logos are pictured at the headquarters of Deutsche Bank in Frankfurt, Germany, Friday, Sept. 30, 2016.
(AP Photo/Michael Probst)
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Since the financial crisis, shareholders have borne the lion's share of the cost of banks' past misconduct.In a recent study of 156 criminal and civil actions brought against large banks by the US Department of Justice (DoJ), individual employees were identified and charged in just 19 per cent of those cases, according to analysis by the Wall Street Journal.Just look at the furore about the proposed settlement between the DoJ and Deutsche Bank. Most bank fines have ranged from the annoying to the painful. In this case, the DoJ went further: the $14bn it was apparently demanding – a startling four-fifths of Deutsche's market capitalization – actually raised questions about the bank's ability to pay.Several large US institutions, including JPMorgan, Bank of America and Goldman Sachs, have coughed up a cool $55bn.Shareholders' control rights are actually more circumscribed in banks than in other corporations.Allowing banks to settle without admitting fully to past misconduct is a form of moral hazard.
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