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It’s the end of the year… and reviewing the behavior of some of the larger banks, if what CNN says is gospel in a recent article of December 28, then some of the banks have been on Santa's naughty list this past Christmas. They certainly are on the bad guys’ team in this struggling economy. Or at least they were at one time and, now, they’re paying for what CNN Money calls their “misdeeds”.

We call those misdeeds, financial mismanagement and manipulation, as in manipulation of the Libor for which USB has agreed to pay the government $1.2 billion in penalties. It’s not so much the fines that banks like USB must pay… $1.2 billion may be just a drop in the bucket from their coffers. It’s how the rest of the investment banking and business world are affected and suffer for their misdeeds that really hurts this country’s economy and credit worthiness, and sends shockwaves throughout the financial world, putting yet another nail in the economy’s coffin.

Many of the penalties the banks must pay are due to improper mortgage practices and much of the fines paid by the banks for the broader mortgage-related settlement will go to help the victims, such as people whose homes were improperly foreclosed and sold. One settlement of $3.5 billion is being paid to state and federal governments to provide housing counselors, legal aid and other similar public programs ( One wonders what the victims actually end up receiving.

When the banks veer from the right track and do shady things, they pay fines… If they get caught. (One wise man said that the only person who got what he wanted from a bank was Jesse James). Very rarely do the misdeed-doers actually land in jail. Better for the banks’ reputation if they simply change employers. Yet, if you or I defraud the IRS (which will not do, of course), we may find ourselves in a small cell with or without a window, 3 squares, and a lot of exercise making license plates.

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