FINANCIAL REFORM NEWSLETTER JULY 17, 2104
On the eve of the 4th anniversary of President Obama signing the historic financial reform law, Better Markets released a national poll of likely 2014 voters to gauge their opinion of Wall Street, big banks and what leaders in Washington, D.C. are doing to protect them from another financial crash: What were the main takeaways? American voters still distrust Wall Street and big banks and strongly support tough financial regulation. The new survey was quickly covered in the media, including in the Los Angeles Times: Poll Finds 64% of voters believe stock market is rigged against them
Again without transparency, oversight or accountability, the Department of Justice unilaterally cut yet another backroom settlement deal with a too-big-to-fail Wall Street bank, Citigroup: “The settlement announced today (July 14) shows again that the Department of Justice (DOJ) is not serious about punishing Wall Street or holding it accountable for its crimes in causing the worst financial crash since 1929 and the worst economy since the Great Depression of the 1930s,” said Better Markets’ President and CEO, Dennis Kelleher. During an interview that evening, PBS NewsHour anchor Judy Woodruff quoted Kelleher in a key question to a top official at DOJ behind the deal with Citigroup, Tony West:
Judy Woodruff to Mr. West: This is Dennis Kelleher of the Better Markets Group. He said to us — quote — “That amount is” — the $7 billion — “is meaningless without the disclosure of the key information about how many hundreds of billions of dollars Citigroup made, how many tens of billions investors lost, how many billions in bonuses were pocketed, which executives were involved, what positions they now have with the bank.”
Mr. West chose to dodge the question. To see more of our views on DOJ’s and Mr. West’s actions and statements, follow us on twitter @bettermarkets
A key Government Accountability Office (GAO) report on “Too-Big-to-Fail” expected to come out any day: Better Markets’ Dennis Kelleher weighed in with Politico’s Kate Davidson, predicting the report could have a major impact on the debate about properly regulating Wall Street’s dangerous too-big-to-fail banks: “It’s a potential game-changer because of the independence and weight accorded to the GAO.” The report is looking at how large the subsidies are for these handful of banks that threaten the financial system and taxpayers.
The SEC announced that it is finally going to vote on a proposed rule next week that is supposed to reduce the real, large and clear systemic risk posed by money market mutual funds: In 2008, the Treasury Department, for the first time in the history of the country, used taxpayers’ money to guarantee a financial product, the $3.7 trillion money market fund industry. That was done to stop a run on the funds and a shutdown of the short term funding markets in the US, which would have rapidly spilled over into the real economy. A real, concrete and severe systemic risk materialized rapidly and was arrested only by massive and unprecedented use of taxpayer money, a de facto taxpayer guarantee of the entire market.
That is what the SEC is supposed to prevent from happening again. Unfortunately, as we detailed in our comment letter, the SEC proposed a weak and almost certainly ineffective rule. This happened even after FSOC (the Financial Stability Oversight Council) had to intervene to get the SEC to act, which we also commented on here and here.
Better Markets Coverage:
Poll finds 64% of voters believe stock market is rigged against them LA Times, July 17, 2014
Poll: Americans want tougher bank regs The Hill Newspaper, July 17, 2014
GAO readies ‘too big to fail’ report PoliticoPro July 10, 2014
Citigroup reaches $7B deal with feds PoliticoPro July 15, 2014
Citi inks $7B deal with Feds – (Better Markets) Not Happy Politico July 15, 2014
With Citigroup paying up, will feds’ attention turn to BofA? LA Times July 15, 2014
Citigroup to pay $7b for ‘egregious misconduct’ leading up to financial crash PBS NewsHour July 14, 2014
Still no real accountability: Citigroup to pay $7B for its “egregious misconduct” MintPress News July 16, 2014
Is Attorney General Holder ready to put Wall Street bankers in jail? Vice.com July 15, 2014
Articles of Interest:
JPMorgan’s earnings decline 8% NY Times July 15, 2014
Goldman’s quarterly profit rises 5% NY Times July 15, 2014
Three takeaways from Citi’s $7B mortgage settlement American Banker July 15, 2014
Yellen: US economy continues to improve but recovery not yet complete Wall Street Journal July 15, 2014
‘Litmus Test’ for regulators over money market funds NY Times July 15, 2014
BofA’s earnings decline 43% on legal costs NY Times July 16, 2014
New report tallies Dodd-Frank’s costs American Banker July 15, 2014
BofA offers $13B to settle US mortgage probe Wall Street Journal July 16, 2014
