Bank of America’s Penalty Misses the Point

The U.S. Justice Department just got Bank of America Corp. to pay about $16 billion to settle charges of selling defective mortgages to investors. The size of the penalty is impressive, and it comes on top of Justice’s other recent big-bank fines, including JPMorgan Chase & Co.’s $13 billion and Citigroup Inc.’s $7 billion. All told, Bank of America will have forfeited about $70 billlion to end legal actions over mortgage lending, much of it stemming from its 2008 purchase of Countrywide Financial Corp. In one way, Wall Street has paid dearly for the misdeeds that led the global economy to crash in 2008. But has the cause of justice been well served? That’s debatable. More on Bloomberg here.