The President hasn’t even announced his plan to regulate the financial industry, but already, there’s a lot of skepticism that anything meaningful will come out of it. For starters, Bloomberg reports that Congress might not even pass it this year.
Bloomberg says the health care and climate change bills are likely to take priority, and…
Obama’s regulatory proposals may be scaled back because lawmakers and the public perceive the financial crisis has abated and support for more aggressive options has faded, said Peter Solomon, founder of investment bank Peter J. Solomon & Co.
“Regulation’s going to be the same thing,” said Solomon, 70, counselor to the U.S. Treasury in the Carter administration. “There’s really been no fundamental change; there’s been a papering over, and this is it again.”
Skepticism abounds. Camden Fine, president of the Independent Community Bankers of America:
“Competing interests will slow it down; they’re not going to kill it. I don’t think comprehensive regulatory reform will get through the Congress this year.”
Chris Whalen, Institutional Risk Analytics:
“You should not assume that they wanted to do anything real. Nobody on the Hill is looking for a revolution. They barely understand the subject matter.”
Six months ago, it was easy to imagine securing an overwhelming change to the financial regulatory structure. Seemed almost a given, in fact. Today, I’d consider it unlikely. Banks have beaten back cramdown legislation and secured the ability to pay back TARP funds and managed to argue the stress test regulators into reducing the capital they needed to raise. They don’t seem to be losing many battles. And 12 months from now? It’s almost impossible to imagine Congress mustering the energy for a massive fight over financial regulation. Momentum matters for these things.
As we speak, popular resentment toward the banks on Capitol Hill and Main Street is ripe and ready for plucking. A year from now, it will be moldy, smelly and stashed away in the refrigerator compartment where you hide lumpy fruit that didn’t make last week’s fruit salad. In other words, this won’t kill the will for financial reform, but it could turn the will into mush.
Is there anyone who thinks substantial regulatory changes will come to pass?
Anyone? Anyone?
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