“THE message to every Wall Street banker is loud and clear,” cried Elizabeth Warren, a senator from Massachusetts, last year. “If you break the law, you are not going to jail.” After the savings-and-loan crisis of the early 1990s, Ms Warren pointed out, over 1,000 people were prosecuted, and more than 800 convicted. Yet since the financial crisis of 2007-08, which did far more damage to the economy, no senior banker has been convicted of any crime related to it. America’s regulators and prosecutors, Ms Warren complained, were not only failing to pursue those responsible; they were also declining to take the banks themselves to court. Instead, they were negotiating murky settlements, in which financial firms agree to pay big fines if prosecutors promise not to press charges.

Events this week have only made the senator more apoplectic. Regulators and prosecutors announced settlements with six international banks for alleged manipulation of currency markets (see article). The six agreed to pay some $5 billion in fines. Two did not admit to any crimes related to this abuse; the other four did, but received waivers shielding them from the consequence that would normally follow—the loss of an all-important banking licence. This week also marked the end of a 90-day period the Department of Justice (DoJ) had given itself to decide once and for all whether it could launch any prosecutions related to the financial crisis. The DoJ says only that it is reviewing the results of the review.

Ms Warren is wrong on many things; on this, she is spot on. (Well almost: one senior banker has been convicted of fraud linked to the financial crisis.) If banks have been involved in acts serious enough to qualify for billions of dollars in penalties, then a few more executives must surely have committed a crime. Negotiated settlements are no substitute for criminal proceedings. For one thing, the punishment falls on shareholders, since the bumper fines come straight out of profits. For another, the lack of trials means there is no proper public examination of the merits of the cases or the calculus behind the penalties; no firm precedents are set indicating how banks should behave in future and what penalties they can expect if they transgress.

Yet this is the way the Obama administration has handled all manner of alleged misdeeds at banks, from turning a blind eye to money-laundering to helping customers get round American sanctions. Even its campaign against banks that abet tax evasion, the one financial crime it is widely reckoned to have tackled with firmness and consistency, looks muddled on close scrutiny (see article).

The wooliness of the government’s approach has sparked a political backlash. Ms Warren, a former academic, secured her seat in the Senate and became a hero of left-wing Democrats by harrumphing about it (see article). It is not just the left that is outraged, however: anger at the lenient treatment of big banks has been one of the main factors animating the right-wing Tea Party movement.

No one’s happy—they’re doing something wrong

Even bankers balk at today’s arrangements. They say they can never contest criminal charges, because they will lose their licences if found guilty. A few small banks that have incurred their prosecutors’ ire have indeed gone out of business. That gives the big ones a strong incentive to agree to whatever settlement the DoJ proposes. Since banks remain unsure which activities will lead to which punishment, they are responding less by altering their behaviour than by hiring former prosecutors and regulators and lobbying for leniency. Smaller foreign banks are trying to limit their activities in America in the hope of escaping this capricious system.

It need not be this way. There is nothing to stop prosecutors pursuing individuals, and being more open and consistent about how they strike deals. At least some cases should go to trial. In the longer term, Congress should make the consequences for banks of a criminal conviction commensurate with the gravity of the crime. That would both serve justice and make America a more attractive financial centre.