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Would it be legal for a bank CEO to invest the banks money in his own business ?

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  • Would it be legal for a bank CEO to invest the banks money in his own business ?


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Answer #1 | 23/12 2013 18:50
Trying to follow the question got me lost. First it was "your" business then it was "my" business. And then you and not the CEO of the bank is giving loan approval? Have you thought this question through? Most politicians refuse to answer "hypotheticals" by the way. (and I am beginning to see their point)
Answer #2 | 23/12 2013 19:03
It's covered by Regulation O that basically says that the bank can lend them money but there is extra scrutiny on the loan and it cannot be on terms that they would not give to outsiders. If the bank CEO did not disclose his interest in the bank and violated Reg O, he could go to jail. The full Regulation O boilerplayte is on the OCC website. Enjoy!

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