The notion that large banks face enormous legal liabilities for their actions during and after the financial crisis is overblown. A U.S. federal judge just dismissed major portions of a complex pile of lawsuits against banks that manipulated Libor. The small chance that the remainder of the lawsuits will end in settlements means banks once again absorb illegal behavior as an overhead cost. This is very normal behavior in a crony capitalist system and indicates very clearly that large banks are increasingly able to operate with impunity beyond legal controls.
I can't connect the dots between a bank's lobbying effort, an appointed regulator's instructions to auditors that water down stress tests, and a judge's decision to ring-fence banks from civil penalties. Nothing is ever that easy. The actors in each phase of that cycle probably don't even know each other. That does not prevent me from seeing which way the wind is blowing. The troika's actions in Cyprus are a waypoint for rules and norms that will soon apply to every advanced economy. The applications in the U.S. will differ in details but not in spirit.
