Have Banks No Shame?

Have Banks No Shame?
By Joe Nocera | NY Times | Submitted by Michael Munk | www.MichaelMunk.com

“All they need to do is enforce the regulations already on the books,” one top banker told me recently. (Like all top bankers these days, he would speak only anonymously, fearing the wrath of the Treasury.)

What’s more — and this is the part that is really unbelievable — they insist that bankers weren’t the cause of the financial crisis. The entities that were peddling all those awful subprime mortgages were the nonbanks — the mortgage originators and mortgage brokers — who were almost entirely unregulated. “We have no objection to them regulating the nonregulated firms,” said Camden R. Fine, the president of the Independent Community Bankers of America.

Well, of course, he doesn’t. If the bankers can persuade Congress to change this agency’s mission so that it only regulates the nonbanks — something they are trying to do, and which Mr. Frank insists will not be successful — they will have succeeded in putting sand in the engine of their nonbank competitors.

A few months ago, I asked Simon Johnson, the former International Monetary Fund economist, now a prominent critic of the banking industry, what he thought the banks owed the country after all the government bailouts.

“They can’t pay what they owe!” he began angrily. Then he paused, collected his thoughts and started over: “Tim Geithner saved them on terms extremely favorable to the banks. They should support all of his proposed reforms.”

Mr. Johnson continued, “What gets me is that the banks have continued to oppose consumer protection. How can they be opposed to consumer protection as defined by a man who is the most favorable Treasury secretary they have had in a generation? If he has decided that this is what they need, what moral right do they have to oppose it? It is unconscionable.”

I couldn’t have said it better myself. Read more.