Monday, December 15, 2014

Private gains, public losses, universally disgusting

From American Banker:
But in finally getting what they wanted, big banks also thrust themselves back into the limelight in the worst possible way, simultaneously reminding the public of their role in causing the financial crisis and in their continuing influence over the various levers of the U.S government. In one fell swoop, they undid whatever recovery to their battered reputation they'd made in the past four years and once again cast themselves as the prototypical supervillain in a comic book movie. 
Observers said the fight was a public relations nightmare for Citigroup and the big banks. 
"They've taken a lot of reputational hits now, a lot of people saying, 'You're trying to blackmail us and not fund our government until you get your way,'" said Sheila Bair, the former chairman of the Federal Deposit Insurance Corp., in an interview on CNBC before the House vote. 
"It's terrible publicity and I just hate to see that because I think the industry needs to be rebuilding trust with the American people right now. You do stuff like this, it just adds to the cynicism about banks, especially big banks."
Many analysts agreed that repealing the swaps provision, which was Section 716 of Dodd-Frank, is likely to only help banks on the margins, since they are allowed to continue engaging in the activity through affiliates. But by fighting so hard, some saw signs of darker motivations. 
"Wall Street's determined lobbying on Section 716 provides compelling evidence that Wall Street's business model depends on the ability of large financial conglomerates to keep exploiting the cheap funding provided by their 'too big to fail' subsidies," said Arthur Wilmarth, a professor of law at George Washington University. "Shame on Congress if it allows megabanks to continue to pursue the same business strategy that brought us the financial crisis."

Citigroup is holding government funding hostage to ram through its government bailout provision. Join me in opposing the

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