Criminal charges against banks risk sparking crisis

As U.S. Justice Department prosecutors angle to bring the first criminal charges against global banks since the financial crisis, they'll have to stare down warnings of uncontainable collateral damage. Stung by lawmakers' criticism that multi-billion-dollar settlements have done too little to punish Wall Street in the wake of the financial crisis, prosecutors are considering indictments in probes of Credit Suisse Group AG (CSGN) and BNP Paribas SA (BNP), a person familiar with the matter said. Bank clients -- including trustees, fiduciaries and pension funds -- could be forced to cut ties with a financial institution labeled a criminal enterprise, the lawyers and bankers said, asking not to be named because they weren't authorized to talk publicly. Damaging a bank's business could lead to broader fallout across the financial industry, just as Lehman Brothers Holdings Inc.'s collapse in 2008 prompted investors to withdraw from other firms on concern its exit would set off a wave of losses.

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