Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Don't believe bank reports, says Partnoy

USD prof says regulators encourage banks' dangerous opacity

University of San Diego Professor of Law and Finance Frank Partnoy, along with Pulitzer Prize-winning Pro Publica reporter Jesse Eisinger, say in the January/February issue of the Atlantic magazine that even the most discerning analyst cannot comprehend the financial reports of the nation's large banks. The 2008 financial crisis resulted from a "lack of transparency" that is still rampant today. "Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash," say the authors. "Large global banks have been accused by U.S. government officials of helping Mexican drug dealers launder money" as well as funneling cash to Iran. In opinion polls, fewer than 25% of people have trust in the banking system. The authors quote a former Federal Reserve board member who says that banks' official disclosures obfuscate more than inform, "and the government is not just permitting it, but seems to be encouraging it."

The authors then go through Wells Fargo's annual report, and find it filled with inscrutable references and opaque footnotes. They went to Wells Fargo with questions, and the bank told them to read the annual report.

"As trust diminishes, the likelihood of another crisis grows larger," write Partnoy and Eisinger. "The next big storm might blow the weakened house down." And then they zero in on the basis of most corporate fraud: "Clever bankers, aided by their lawyers and accountants, can find ways around the intentions of the regulations while remaining within the letter of the law."

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

Melissa Etheridge, The Imaginary Amazon

Events April 1-April 3, 2024

University of San Diego Professor of Law and Finance Frank Partnoy, along with Pulitzer Prize-winning Pro Publica reporter Jesse Eisinger, say in the January/February issue of the Atlantic magazine that even the most discerning analyst cannot comprehend the financial reports of the nation's large banks. The 2008 financial crisis resulted from a "lack of transparency" that is still rampant today. "Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash," say the authors. "Large global banks have been accused by U.S. government officials of helping Mexican drug dealers launder money" as well as funneling cash to Iran. In opinion polls, fewer than 25% of people have trust in the banking system. The authors quote a former Federal Reserve board member who says that banks' official disclosures obfuscate more than inform, "and the government is not just permitting it, but seems to be encouraging it."

The authors then go through Wells Fargo's annual report, and find it filled with inscrutable references and opaque footnotes. They went to Wells Fargo with questions, and the bank told them to read the annual report.

"As trust diminishes, the likelihood of another crisis grows larger," write Partnoy and Eisinger. "The next big storm might blow the weakened house down." And then they zero in on the basis of most corporate fraud: "Clever bankers, aided by their lawyers and accountants, can find ways around the intentions of the regulations while remaining within the letter of the law."

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.