Regulating banks: Garrottes and sticks
The first of four articles on the implications of the Volcker rule examines reactions on Wall Street
A RECENT episode of “Mad Money” on CNBC, a financial-news network, featured the “Lloyd Blankfein pinata”. Hung from the studio ceiling to symbolise the beating that bankers—not least Goldman Sachs’s boss—have been taking lately at the hands of politicians, the effigy rained down fake gold coins when split apart.
Wall Street’s predicament is the inverse of the one it faced in late 2008, says Frederick Cannon of Keefe, Bruyette & Woods, a broking firm. Then, officials wheeled out weekly plans to save banks. Now they are rushing out measure after measure to punish the survivors, accompanied by increasingly fiery rhetoric. Barack Obama kept up the assault in his State of the Union address this week. Admitting that the bank bail-out was “as popular as a root canal”, he vowed to take on lobbyists who were “already trying to kill” financial reform. ...
