(Campaign for America’s Future Blog) – The Justice Department’s latest settlement with felonious big banks was announced this week, but the repercussions were limited to a few headlines and some scattered protestations.

That’s not enough. We need to understand that our financial system is not merely corrupt in practice. It is corrupt by design — and the problem is growing.

Let’s connect the dots, using news items from the past few weeks:

The Latest Sweetheart Deal

Four of the world’s biggest banks pleaded guilty to felony charges this week, agreeing to pay roughly $5.6 billion in fines for fixing the price of currencies on the foreign exchange market. Justice Department officials made much of the fact that, unlike previous sweetheart deals with Wall Street, this one required the banks’ parent companies to enter a guilty plea.

That’s an improvement over previous deals. But it’s not as significant as it might have been, since the settlement wasn’t finalized until the banks were able to strike side agreements with regulators to ensure they’d be able to keep doing business as usual.

One of the institutions involved in this deal was Citigroup. That’s the bank whose self-written and self-serving “Citigroup amendment” passed Congress last December, a move which made it the target of an epic Elizabeth Warren takedown.

Another was J.P. Morgan Chase. Chase CEO Jamie Dimon was lionized for far too long by politicians and members of the mainstream media, many of whom insisted that Dimon was smarter and more ethical than his peers. There is now a considerable body of evidence to contradict that assertion — and it keeps on growing.

All four of these banks are repeat offenders with long records of serial fraud, as even this outdated graphic shows.

In A Related Development …

A fifth bank, UBS, was forced to give up a deferred prosecution deal as a result of its involvement in currency exchange fraud. In “deferred prosecution” agreements the Justice Department agrees not to prosecute a bank for crimes it has committed if it keeps a promise not to commit those crimes again. It was not clear whether this would lead to any real-world consequences for the bank, however.

In yet another related development, Bank of New York Mellon Corporation agreed this week to pay $180 million to settle a foreign exchange-related class-action lawsuit. This followed a $714 million settlement for writing pension funds and other institutional clients by overcharging them for currency transactions.

J.P. Morgan Chase — Again

This one seemed to slip through under the public’s radar. In a development that will trigger severe dÃ©jÃ vu for anyone who’s been following the big banks’ foreclosure scandals, the serially criminal J.P. Morgan Chase agreed on March 3 to pay more than $50 million over “robo-signed” documents — that is, documents that the bank fraudulently submitted to courts in mortgage-related hearings.

From the Wall Street Journal:

” … Bank officials admitted to filing more than 50,000 payment-change notices that were improperly signed, under penalty of perjury, by persons who hadn’t reviewed the accuracy of the notices, according to Justice Department officials.”

Telling a court you’ve reviewed a document when you haven’t? That’s perjury.

The Journal also noted that the Justice Department found that “more than 25,000 notices were signed in the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings.”

Again: perjury.

Many people lost their homes unjustly as a result of this mass-produced fraud. The practice was so widespread at J.P. Morgan Chase that it required the hiring of untrained college-aged temps — referred to within the organization as “Burger King kids” — to generate all the fraudulent paperwork.

This is where we’re obliged to insert a sentence that has long been superfluous when reporting on deals of this kind:

The Justice Department did not announce the indictment of any individual bankers for the crimes that led to this settlement.

Corrupt, And Getting Worse

In an expanded version of a survey we first reported on in 2012, an updated study on behalf of law firm Labaton Sucharow found a deep-seated culture of immoral behavior among bankers in the United States and Great Britain. And it found that the situation was getting worse, not better, noting “a marked decline in ethics” since the first study was conducted.

The authors also found that there had been a “proliferation of secrecy policies and agreements that attempt to silence reports of wrongdoing and obstruct an individual’s fundamental right to freely engage with her government.”

In other words, bankers are becoming even more unethical — and banks are making it harder to report ethical lapses to the authorities.

The percentage of bankers who believed their own colleagues had engaged in illegal or unethical behavior has nearly doubled since 2012. And more than one-third of those earning $500,000 or more annually said they had first-hand knowledge of wrongdoing in the workplace.

Born This Way?

The Labaton Sucharow study illustrates something important: Crooked bankers aren’t born. They’re made.

According to the report, “Nearly one-third of respondents (32 percent) believe compensation structures or bonus plans in place at their company could incentivize employees to compromise ethics or violate the law. “

In fact, bankers’ bonuses do incentivize unethical and criminal behavior — and anything else it takes to generate profits. “Clawbacks” for ill-gotten gains are still few and far between. Remarkably few bankers have been fired for the widespread fraud that continues to characterize their industry. Prosecution for criminal behavior is extremely rare.

A system that rewards antisocial behavior begets social tragedy. It’s also a law enforcement nightmare. Criminology teaches that the presence of reward for criminal behavior, along with the absence of deterrence, almost inevitably leads to more crime.

The song says “you’ve got to be taught,” and this lesson apparently hasn’t been lost on the newest generations of bankers. “We are particularly dismayed by the ethical standards of the most junior employees in the industry,” write the authors of the Labaton Sucharow study, who found that younger bank employees were much more likely than their elders to admit a willingness to commit fraud if given the opportunity to get rich illegally and get away with it.

But then, why wouldn’t they? The banking industry’s incentive system, combined with the government’s refusal to prosecute, has taught them that the old saying is wrong: crime does pay.

Back On Top

Wall Street certainly isn’t suffering in the wake of the financial crisis it created. The financial industry is nearly as large as it was before the crisis. In fact, its profits are as large a chunk of the total economy today as they were before Wall Street imploded (and was rescued by taxpayers).

Neil Irwin of the New York Times notes that current bank profits are “more than double their average level over the 70 years ended in 1999.” That’s called financialization. It’s what happens when the productive economy of building, selling, and servicing things is crowded out by unproductive activities that redirect profits toward the manipulation of money.

As Irwin notes, bankers’ incomes are rising again, and the World Financial Center’s vacancy rate has fallen to 5 percent from a post-crisis high of 41 percent.

The Wall Street Journal reports, “Top executives from the biggest U.S. banks, concerned about anti-Wall Street rhetoric already bubbling up on the 2016 campaign trail, are working to push back against the prevailing narrative that banks are bad.”

Are they rooting out corruption inside their own institutions? Changing their incentive plans? No. According to the Journal, discussions centered on “finding ways to emphasize the positive role banks play in the economy and the changes big firms have made since the 2008 crisis … by engaging with local media, elected officials and community leaders.”

That’s not likely to move hearts and minds among the public at large. Two-thirds of voters polled last year for Better Markets said they believe “the stock market is rigged for insiders and people who know how manipulate the system.”

“Deep-Seated Cultural and Ethical Failures”

These voters are right — and they’re not alone. William Dudley, president of the Federal Reserve Bank of New York, spoke in 2013 of “deep-seated cultural and ethical failures” and “the apparent lack of respect for law, regulation and the public trust” in the culture of our biggest banks.

Dudley reached that conclusion in 2013, and the Labaton Sucharow study suggests that banker ethics have gotten worse since then.

Our banking system has a design problem, because its incentives are broken. Financialization is stifling the productive economy. And the systemic threat posed by our biggest banks has made them immune from real punishment.

These massive financial institutions don’t need a PR campaign. They need to be cleaned up — and they need to be broken up.

“If you ain’t cheating,” said one of the traders involved in the currency exchange scandal, “you ain’t trying.” If we’re not addressing the financial sector’s systemic threat to our economy, or its affronts to our system of justice, then we ain’t trying either.