Spending bill fight keeps big banks in bad light
WASHINGTON (12/15/14)--By pushing hard for a provision that would only benefit Wall Street behemoths, big banks may have "thrust themselves back into the limelight in the worst possible way" during the House fight to pass legislation to fund the U.S. government, according to observations in a Dec. 12 American Banker article.
The House voted late Thursday to approve a spending bill, and that legislation includes an unrelated, bank-supported provision to repeal a Dodd-Frank Act requirement that big banks move a portion of their derivatives business into subsidiaries.
The article observes, "But in finally getting what they wanted, big banks also thrust themselves back into the limelight in the worst possible way, simultaneously reminding the public of their role in causing the financial crisis and in their continuing influence over the various levers of the U.S government.
"In one fell swoop, they undid whatever recovery to their battered reputation they'd made in the past four years and once again cast themselves as the prototypical supervillain in a comic book movie."
Sheila Bair, the former chairman of the Federal Deposit Insurance Corp., is quoted from an interview on CNBC before the House vote. She notes that big banks have taken a lot of reputational hits and now "a lot of people are saying, 'You're trying to blackmail us and not fund our government until you get your way.'"
She added that she hated to see it because the industry needs to be rebuilding trust with the American people right now, and actions like this add to the "cynicism about banks, especially big banks."
The article also notes that Sen. Elizabeth Warren (D-Mass.) tweeted early in the day:
"Citigroup is holding government funding hostage to ram through its government bailout provision. Join me in opposing the #CitigroupShutdown."
The Senate is expected to take up the House-passed funding bill soon.