The Fed has been engaging in closed door meetings to change rules for banks. It wasn't until Victoria McGrane and Jon Hilsenrath at the Wall Street Journal asked for the results of votes that the Fed posted them on its web site. Since June 2010, the Fed has held only two public meetings on the changes. But just on the topic of derivatives alone it held 14 meetings with JPMorgan Chase, 12 meetings with Deutsche Bank and Goldman Sachs, and 11 meetings with Bank of America, Barclays, Morgan Stanley and Wells Fargo.
How effective will the Fed's regulations be after it has taken so much input from banks that vigorously lobbied against the already impaired Dodd-Frank Act?
Without knowing more about the meetings, no one can say for sure, but based on the events since the September 2008 on-going financial crisis, I can take an educated guess. The banks will largely have their way in diffusing effective regulation. After all, they've been remarkably adept at preventing the enforcement of perfectly good laws and regulations already in place before during and after the bailouts.
Not only have the banks been defiant, but so have luminaries in the financial community -- at least until they were called out on it.
In January 2009, Warren Buffett, CEO of Berkshire Hathaway, told Tom Brokaw: "the idea that people that move money around are some favored class... strikes me as getting pretty far away from where we should be." Two years later he issued a PR release excusing apparent insider trading by one of his successor candidates, David Sokol. Within a few months, he changed his position in the face of shareholder and media pressure and called the evidence very damning.
Berkshire Hathaway board member Charlie Munger admonished law students that Americans shouldn't be "bitching about a little bailout." Actually, people don't want a collapse of the financial system, but they don't want bailouts with no consequences to those that created the problem in the first place and were poor stewards of their financial institutions. Somehow Mr. Munger left out that last crucial bit.
Shortly before Congress confronted him with Goldman Sachs's profiteering during the financial crisis, Goldman CEO Lloyd Blankfein quipped he was doing "God's work."
CEO Jamie Dimon told shareholders that he didn't think JPMorgan made a mistake when it came to potential foreclosure fraud: "maybe we'll have to pay penalties eventually to some of the attorneys general but we really think we should just continue." Meanwhile the bank scoured 115,000 mortgage affidavits and reserved $1.3 billion for legal costs.
After MF Global's October 31, 2011, bankruptcy a U.S. Congressman told former CEO Jon Corzine: "You've got thousands of hard working people around this country that feel cheated."
Since 2008, we've seen example after stunning international example of no-strings-attached socialization of losses and privatization of gains. Nothing has changed for the better, because big money interests like it this way, and they are the largest contributors to Congress. The lack of promised campaign finance reform has enabled the ongoing saga of what most of us would call deft theft of public funds.
Original Article
Source: Huff
Author: Janet Tavakoli
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