Anyone who doubts the big banks will succeed in the new regulatory environment by quickly jumping into bed with government is already wrong. To secure its place in the Treasury-financial complex, Bank of America has come out in full support of Komrade Obama's sweeping overhaul of financial services regulation. As Bloomberg put it, "The Obama administration has found a banker it can do business with: Bank of America Corp.'s Brian Moynihan."
Moynihan, Bank of America's CEO, has wined and dined the likes of Treasury Secretary Tim Geithner and economic advisor Lawrence Summers. He's in. He's one of them now. And Bank of America will remain competitive because of it.
Jamie Dimon, CEO of JPMorgan Chase, is coming around, too. Back in June 2009, Dimon warned in a Wall Street Journal op-ed piece about "the danger of the pendulum swinging too far," meaning too much government intervention in the economy. A month ago in a Chicago speech, according to Bloomberg, Dimon expressed support for 80% of the overhaul plan. Goldman Sachs has already settled with the SEC in the mortgage trading scandal. Big bankers make big money not in spite of the government, but with its substantial assistance. Whether they admit it or not, government support is one of the most important reasons investors like John Paulson and Bruce Berkowitz own stocks like Bank of America, Goldman Sachs, and Citigroup.
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