The U.S. government had a real opportunity to reign in risky behaviour at Wall Street banks while the bailed-out firms were still under their thumbs.Of course it would have been difficult, for one because some of the Wall Street banks took money from the Fed from the TAF fund (Term Auction Facility), which was designed to remove the discount window stigma from banks that actually needed it. (Click here to read more >) So they may have been only under Washington’s thumb because the government needed a favour.
But here’s proof that Washington totally caved to Wall Street when it mattered most, from Bloomberg:
Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives.
The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc. and Morgan Stanley, according to data compiled by Bloomberg.
Is that disturbing, or what?
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