“IT WOULD be suicidal to fight them,” says the chairman of a big international bank, speaking of America’s regulators and prosecutors. A week of settlements, fines and provisions by big banks in Europe and America underscores just how ready authorities are to raise the whip hand and how quick banks are to pay up rather than go to court. Lost in the flurry of payouts is any clear adjudication of what banks have done wrong, and therefore any guidance for setting things right.

JPMorgan Chase agreed to the biggest of these settlements, of $5.1 billion (with perhaps billions more to come) related to mortgages that it, and banks it later acquired, had sold to two government-backed firms, Fannie Mae and Freddie Mac. In Europe Rabobank, a Dutch co-operative, agreed to pay almost $1.1 billion after admitting that some of its employees had joined in the manipulation of LIBOR, a benchmark interest rate. Piet Moerland, its boss, resigned. In Germany Deutsche Bank set aside €1.2 billion ($1.7 billion) in provisions for litigation. Swiss regulators told UBS to set aside 586m francs ($652m) against possible legal costs and fines.

A billion here and a billion there soon add up. SNL Financial, a data firm, reckons that over the past three-and-a-half years America’s six biggest banks have agreed to pay more than $65 billion in settlements related to the financial crisis and mortgages. Further claims and expected settlements will soon push this figure to $85 billion, it says.

Add in settlements agreed to or being negotiated by European banks and the bill easily tops $100 billion. These include the $1.9 billion fine imposed on HSBC over weak money-laundering controls, the $1.5 billion settlement agreed to by UBS for manipulating LIBOR and the £16 billion ($26 billion) British banks have set aside to compensate customers who bought useless loan-insurance policies. It is not just banks in the firing line. SAC Capital, a hedge fund, was expected to reach a $1.2 billion settlement of criminal charges relating to securities fraud as The Economist was going to press. This follows an earlier $616m settlement of civil claims against the fund.

To a public angry at banks for their role in the financial crisis, this may all seem like reasonable retribution. Yet in many cases the rush to punish is overturning basic principles of justice. Take the settlement agreed to by JPMorgan. The accompanying statements from both the bank and the regulator involved, the Federal Housing Finance Agency, provided no indication of what the firm did wrong and no admission of guilt. JPMorgan is the fourth institution to settle over its dealings with Fannie and Freddie without going to trial, following settlements by General Electric, Citigroup and UBS.

Bank executives contend that they have little choice but to accept punitive settlements because the alternative, facing a criminal indictment and going to court, could destroy their businesses, even if they are subsequently found not guilty. This is because they risk losing their banking licences or being shunned by clients while charges are pending. In some cases regulators make these threats explicitly. Last year New York’s financial regulator threatened to revoke the state banking licence of Standard Chartered, which would in effect have excluded the British bank from America. “If you’re a financial institution and you’re threatened with criminal prosecution, you have no ability to negotiate,” Warren Buffett, an investor, said recently. “Basically, you’ve got to be like a wolf that bares its throat…You cannot win.”

The merciless pursuit of settlements through the threat of criminal prosecution and the withdrawal of licences not only denies banks the right to a fair hearing, but also sometimes forces them to waive other rights. In a further settlement being negotiated between JPMorgan and the Department of Justice, the department is trying to bar the bank from seeking redress from another government agency, the Federal Deposit Insurance Corporation (FDIC). The bank argues that it was indemnified against some liabilities when it bought Washington Mutual, a failed mortgage lender, from the FDIC during the financial crisis. The FDIC denies this. Although the facts surrounding the claim are in dispute, it is surely wrong to deny the bank the chance to put them before a court.

The bill presented to banks does not stop at fines and redress. The industry is spending billions more trying to comply with new rules of dubious worth. In the first half of this year HSBC added 1,600 people to ensure compliance with proliferating regulation. JPMorgan has added 4,000 people to “control efforts” since the beginning of last year, and increased spending to that end by $1 billion this year alone. Standard Chartered has added 2,000 compliance staff over three years, even as its total headcount has fallen.

Besides raising costs for banks and their clients the current climate of fear poses a number of longer-term risks to the financial system. The first is that big banks will be less ready to buy units of failed rivals, as JPMorgan and others did during the financial crisis. That will make future crises more difficult to manage. As worrying is that banks are being discouraged from confessing to wrongdoing or sharing concerns with regulators. That may make it more difficult for supervisors to assess future risks. And without any proper accounting of banks’ sins, no one will ever know whether justice has been done.