Better Than Bailouts: The Banking System’s Quiet Lobby
Wednesday, 06/3/2009 - 11:20 am by Lynn Parramore | Post a Comment
The New York Times has an article this week about banking efforts that have escaped notice: namely, to lobby for–you guessed it–deregulation. The Times says the banks, through their lobbyists, have been pressuring legislators to back off regulation of credit default swaps and other securities.
You read that right: Banks are lobbying the government to maintain tight, quiet control over the very trading practices that brought the financial system down—you know, before the government put billions of taxpayer dollars in bank vaults.
The Times reports that it obtained a confidential memo from a banking lobbyist, recommending that “the derivatives market should continue to be overseen by the Federal Reserve Board. Critics say the Fed has been an overly friendly regulator, which is why big banks favor it.”
Heard this somewhere before? The proposal, the Times continues, “was similar to the Treasury Department’s recently announced plan to increase oversight. Treasury officials say that their proposal was arrived at independently and that they sought input from dozens of sources.”
The continued leverage of the banking lobby hasn’t escaped notice, however. Collin C. Peterson, a Democract from Minnesota who chairs the House Agriculture Committee, said during its February hearing: “The banks run the place….I will tell you what the problem is — they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”
As a result of the lobbying efforts, champions of broad-based regulation are concerned that proposals will be significantly limited by banking interests.
Michael Greenberger, a professor at the University of Maryland Law School and a former director of trading and markets at the C.F.T.C., told the Times: “The outrage among the public means that things have a chance to change, if things move quickly….We’re in this brief moment of time when the average citizen is on a level playing field with the lobbyist.”
It was nice while it lasted.
