While this is an interesting story, it truly highlights the cozy relationships between D.C. (regulators) and the people they are supposed to be regulating. I often read about dinners and other such events that Geithner (or before him Paulson) would have with the chief honchos at our oligarchs (and their lobbyists) - you have to really wonder what the purpose of these events are. Does the small business owner ever have a chance to sit down with government on a one on one basis for a mutually beneficial give and take on regulation and/or to have extra information on coming rule changes along with direct political influence? And I'm not just talking financial industry...
Anyhow, it appears for once the financial oligarchs were completely blindsided - they are not used to their lobbyists not being allowed to actually write the legislation in Corporamerica. It truly is amazing how 1 election shook things up.
- When Treasury Secretary Timothy F. Geithner and White House adviser Valerie Jarrett hosted a private dinner with the leaders of six banks to discuss financial regulation on Jan. 20, the bankers soon changed the subject. The president needed to stop demonizing Wall Street, they told Jarrett, according to three people familiar with the meeting.
- What the executives, including Brian Moynihan, the chief executive officer of Bank of America Corp., and Robert Kelly, the chief executive of Bank of New York Mellon Corp., didn’t know was that President Barack Obama, who had proposed a new tax on the biggest banks six days earlier, was about to strike again.
- After leaving the meeting around 9 p.m., the executives learned that Obama would ask Congress the next day to ban commercial banks from running proprietary trading operations, owning hedge funds, and rapidly increasing market share.
- Industry officials said they were stunned. “We did not know it was coming, that’s for sure,” said Scott Talbott, a lobbyist for the Financial Services Roundtable, which represents large banks and insurance companies and whose chairman, Richard Davis, the CEO of U.S. Bancorp, also attended the dinner.
- Now the firms and their chiefs, confronting a wave of public anger against their bonuses awarded in the wake of the financial industry bailout, are trying to devise a strategy to fight both the proposed new limits on banks’ size and activities as well as the bank tax.
- That the president’s top advisers failed to give the financial executives a heads-up, even while reporters were being briefed on the plan, underscores how strained the banks’ relationship with the administration has become. (sort of bemusing to watch the claws come out at this point of desperation... well it would be if all this nonsense had not damaged the prospects of the country and it's people so severely)
I had to laugh at this part
- As a goodwill gesture, some executives whose firms are members of the Financial Services Forum agreed, at the Treasury’s request late last week, to contact senators and urge them to confirm Federal Reserve Chairman Ben S. Bernanke, the people said. Nichols declined to comment.
That pretty much sums up the system right there. The non political Fed with its independent Chief begging for votes... and the regulator of said financial firms asking his buddies to make some calls to our politicos.
And this is different than any solid third world crony government how?
- The banks are not hanging up their lobbying spurs, and instead are counting on allies in Congress to slow the momentum. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, hasn’t said whether he will support the restrictions outlined by Obama.
Thankfully, Dodd aka A friend of Angelo Mozill is gone after this term. (If you don't know what I am referencing, see here) Cannnot wait to see which oligarch's firm he lands at.
- While the lobbyists predict the tax, which Obama would levy on financial companies with more than $50 billion in assets to raise up to $117 billion over 12 years, will easily pass the House, they say it will be toned down in the Senate.
- The administration’s renewed push against the industry has caused a fissure in what has often been a unified industry front. Many smaller banks, for instance, aren’t opposed to the trading and size limits in Obama’s plan. Wall Street firms “are ramping up their lobbying machines like there is no tomorrow,” said Camden Fine, president of the Independent Community Bankers of America. “I’m sure they feel threatened, but when you get down to it, they brought this on themselves.” (Mr. Fine obviously does not watch CNBC ... remember if you threaten the 6-7 oligarch banks you are attacking capitalism. You also might be Canadian. Or worse - French)