How would a lobbyist look at FinReg?
Mike Konczal examined Sen. Chris Dodd's FinReg bill from an interesting angle:
What would an investment bank hate about this bill, and lobby hard to change? I actually read this bill as if I was a Goldman Sachs lobbyist, looking for all the sections that I hated and made a list of what items I needed to lobby hard on to kill or modify.
My final verdict, by the time I got to the end? If I was a Goldman lobbyist, I’d probably shrug and go “eh, pass it.”[...]
If I was advising you, as a taxpayer, I’d point out that since we don’t want to shrink the biggest banks, we are going to be putting a lot of stress on unproven and uncertain powers and institutions, particularly the Federal Reserve’s ability to discipline the largest financial firms, and resolution authority’s ability to take on firms whose business model is, in part, to warehouse gigantic derivatives portfolios.
My sense is there's plenty in the bill Goldman Sachs will lobby to change, if for no other reason than Goldman's lobbyists need to show what they're doing to deserve their massive paychecks. But there's nothing in there that Wall Street can't live with. The bill is fundamentally about ensuring there's order and information in the event of a financial crisis. It is not about changing the way Goldman Sachs does business, which is what they really fear.
And maybe that's okay. Maybe you just want to give regulators a better chance to detect the next financial crisis and more powers to respond to the crisis if they miss it. But if you're interested in crisis prevention -- and I am -- the bill is disappointing on that front.
March 17, 2010; 3:59 PM ET
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