Exclusive outtakes from industry leaders
Phil Angelides, Financial Crisis Inquiry Commission chairman, says he’d rather see some taking of responsibility than hear another “I’m sorry.”
“Personally I don’t see my role as … to obtain apologies. What I don’t hear is a sense of responsibility and self-assessment about what occurred. There seems to be a disconnect between the practices that people undertook and the financial collapse,” he said at the Reuters Global Financial Regulation Summit.
“I’m struck by the extent to which all fingers point away generally from the person testifying,” Angelides said.
And it’s not just Wall Street executives that he’s talking about.
“When Alan Greenspan came in front of us he said he’d been 70 percent right, 30 percent wrong. Well, you know, the captain of the Titanic was probably 99 percent right and one percent wrong. It’s the enormity of the mistake that matters,” he said.
You can call him mediator, or you can call him negotiator, but don’t call him pay czar.
Kenneth Feinberg says he doesn’t like the shorthand title that’s used to describe his role as the administration’s supervisor of compensation practices at firms that received money under the government’s Troubled Asset Relief Program.
Banker bashing has become a bit of an international sport — and fraud allegations against Wall Street giant Goldman Sachs and a U.S. class-action suit against Germany’s Deutsche Bank has added more grist to the mill. So it’s small wonder that a bank lobby group struck a wistful note at the Reuters Global Financial Regulation Summit in London on Tuesday.
“No politician, for the next couple of years, is going to be close to a banker, hug a banker, be friendly to a banker,” said Mark Austen, the acting chief executive of AFME (Association for Financial Markets in Europe). “They (banks) are seen as institutions that have caused a crisis … We are still faced with a public’s anger to the banking community … It will take time to rebuild that trust.”
This much is clear — Eliot Spitzer loved politics, he loved being New York governor, he loved being New York attorney general.
So will he run for public office again?
Well here it gets a little bit like watching a tennis ball going back and forth over the net.
That, anyway, is what Europe’s new kid on lobbying block, the Association for Financial Markets in Europe (AFME’s), told the Reuters Regulation Summit about EU plans to crack down on opaque derivatives markets by insisting on central clearing of standardised contracts, trade reporting and even exchange trading.
The European Commission will propose its draft European Markets Infrastructure Legislation (EMIL) in June which should make for some pointy headed pool side reading during the summer consulation period.
Credit rating agencies are back in the spotlight and, just like a year or two ago, for all the wrong reasons.
Last week a U.S. Senate panel said the clout of Wall Street’s big banks and the thirst for profits drove ratings agencies to inflate ratings on subprime mortage-related products, helping to fuel the worst financial crisis since the Great Depression. Making things worse for Moody’s, S&P and Fitch, the Senators pointed to securities backed by subprime loans that Goldman offered in 2007 — now the subject of an SEC fraud lawsuit — as further evidence of questionable industry practices. Goldman has rejected the accusations.
First of all, Securities and Exchange Commission Chairman Mary Schapiro would not talk about Goldman Sachs.
There was no drawing her out. The head of the agency that filed a civil fraud lawsuit charging that Goldman misled investors would not say a word about the case.
The latest blame game circulating in Washington on financial regulation may end up with those who point fingers finding that they have three fingers pointing back.
During the debate on tightening financial regulations, there have been some backhanded jabs at regulators with the implication that perhaps they were asleep at the wheel. Just this morning on NBC’s “Today” show, Democratic Senator Claire McCaskill said Wall Street had been creating things just to bet on — “they were like the casino, but they had less regulation than Las Vegas.”
Democrats and Republicans alike on Capitol Hill say they want to toss out the concept of “too big to fail” in the financial regulation reform they are tussling over. That way if a financial firm is going to go under, it will go under, with no thought for a taxpayer handout.
Since the concept of “too big to fail” has yet to be erased by law, and its demise yet to be tested by a failing financial institution, it was interesting to hear how Kansas City Federal Reserve Bank President Thomas Hoenig envisioned the financial industry without that concept to lean on.
Gary Gensler, chairman of the Commodity Futures Trading Commission, likes to go to the past — sometimes as far back as 1,000 years — to explain the financial situations of today.
For example, derivatives existed for 145 years, since the Civil War, and they became regulated in the 1930s, he said at a Reuters Global Financial Regulation Summit in explaining that derivatives need regulation.