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SUNDAY, NOVEMBER 22, 2009
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5

Banks Get Back to Risky Business as Usual

Plans to overhaul regulation losing momentum as banks return to health

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(Newser) – Banks that teetered on the edge of extinction last year are returning to their old ways as the shock of the financial crisis fades, the Wall Street Journal reports. The banks are handing out hefty compensation packages again and dealing in the same risky financial instruments that caused last year's collapses. Wall Street "has been tiptoeing back into the pond," says one former regulator. "They have short memories."

The radical overhaul of financial regulation called for in the wake of the financial crisis has failed to materialize, with reform plans becoming bogged down amid infighting between regulators and lawmakers. Regulators warn that momentum for reform is being lost as the banks return to profitability. "We are under no illusion that things left to their own devices will evolve back to a healthy normal,"  said White House National Economic Council Director Lawrence Summers.

Dara Blumenthal, of Brooklyn, holds up a sign during a rally last year against Wall Street bailout in front of the New York Stock Exchange.
Dara Blumenthal, of Brooklyn, holds up a sign during a rally last year against Wall Street bailout in front of the New York Stock Exchange.   (AP Photo/Mary Altaffer, file)
A specialist studies his screens as he works on the floor of the New York Stock Exchange.
A specialist studies his screens as he works on the floor of the New York Stock Exchange.   (AP Photo/Richard Drew, file)
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There's no fundamental change in the way the banks are run or regulated. There's just fewer of them.
- Peter J. Solomon,
a former Lehman vice-chairman

« Prev« Prev | Next »Next » Slideshow
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5 comments
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Scrambles
Sep 9, 09 2:03 AM CDT
no surprise, money is god Reply
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+2
IN RESPONSE:
WallyEFunk
Sep 9, 09 2:42 AM CDT
And yet they have the support, of middle class PPL that get no benifit from it.Only the tax bale out bill. that stoped the whole country from going down the toilet. Oh! Is it's that commie or socialist word that makes them lose their free thinking.
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0
IN RESPONSE:
wwwonderer
Sep 9, 09 9:57 AM CDT
In Wealth We Trust: Annuit cœptis (He approves (or has approved) [our] undertaking(s)). Novus ordo seclorum (New Order of the Ages).
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+1
Bambi
Sep 9, 09 2:31 AM CDT
Human nature is short sighted when offered immediate gratification. Let's not malign the zealous bankers for doing what is natural for ambitious people to do. Government analysts should have the perspective to create and enforce policy to act as prophylactic against 'human nature'. Let government policy check runaway ambition by forcing perpetrators to contemplate jail time should they 'overdo' it in ways detrimental to the integrity of the system as a whole. It's not really about right and wrong, or even greed, it's about necessary oversight and consequences for transgressions. It just needs to be made unworthy of the risk. Only law will accomplish that. Reply
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+4
IN RESPONSE:
Snarfeh
Sep 9, 09 4:50 PM CDT
Bambi in 2012!
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