Imagine if bank robbers were penalized by taking 4/5ths of the profit from only one bank robbery, then released to continue robbing banks.
In 2014 they paid an additional $3B. Worth noting that GS played a much smaller role in underwriting the bad loans than the likes of BoA and JPM ($16.6B and $13B settlements), mostly they were vilified for seeing the train wreck coming and helping some investors profit off the implosion.
I think the reality is that the fines are absolutely significant and do change behavior at the banks. It is a typical human response to want to crush them under your boot into oblivion, but I think counter-productive.
I disagree. What if it were a company like Amazon that operates with over 100 billion in revenue but less than a billion in income (many years actually ending up red)? Would 500 million an appropriate fine for, say, willingly misleading consumers about billions of dollars in fraudulent items? If anything, I'd argue income should be the irrelevant number in a scenario like this, though the only numbers that really should matter are ones based on the magnitude of the damage the wrongdoing causes.
> the fines are absolutely significant and do change behavior at the banks Is there any evidence of this?
> It is a typical human response to want to crush them under your boot into oblivion, but I think counter-productive. Maybe, but I'd argue penalizing one of the major creators of a global financial crisis with a fine that doesn't even cause them to go into red for _one_ year is even worse. Fines all accounted for, GS profited off of the crisis, no executive lost their job, and the behavior that caused millions to lose homes and pensions continues on almost totally unchanged. The human response is to want justice served, and this isn't it.