Wall Street one year after Lehman
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TEXT OF INTERVIEW
Bill Radke: President Obama today marks the one-year anniversary of the Lehman Brothers bankruptcy with a speech on Wall Street. Lehman’s collapse set off a wave of changes that had a lot of people declaring the end of Wall Street as we knew it.
Marketplace’s New York Bureau Chief Amy Scott joins us live. Good morning, Amy.
Amy Scott: Good morning, Bill.
Radke: This is your beat. How different is Wall Street one year later?
Scott: Well in many ways, it is quite different. A year ago, we still had four big stand-alone investment banks. Today, of course, not only is Lehman Brothers gone, but Merrill Lynch is part of Bank of America, and Morgan Stanley and Goldman Sachs are commercial banks, which means they’re subject to more regulation. So it’s a smaller industry — thousands of jobs have disappeared. But in other ways, it’s almost business as usual. Banks have had billions of dollars in profits this year, several have paid back their bailout money. Financial companies’ stocks have recovered a lot of their lost value. And bonuses, while significantly down last year, are expected to be plenty high again this year in many cases.
Radke: Well, you mentioned regulation there, Amy. There was a lot of talk about that a year ago and has been. But is there still momentum for real regulatory change or is that past?
Scott: Well, Congress has of course been distracted by issues like health care reform. There are a lot of proposals on the table for a real overhaul — things like higher capital requirements so that banks have to have a bigger cushion to protect against risk. But people I’ve talked to are mixed about how much of this will really become law. They say that Congress probably won’t pass anything until next year, and it’s likely to be substantially watered down thanks to aggressive lobbying by industry, and of course regulatory turf wars — particularly if the economy continues to recover.
Radke: Marketplace’s Amy Scott live in New York. Thank you.
Scott: You’re welcome.
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