House investigators are alleging a White House double standard in its rhetoric toward executive compensation for large financial institutions. The allegations appear in a report released in advance of a hearing on government-back housing giants Fannie Mae and Freddie Mac. President Obama ramped up the populist rhetoric in 2009 with respect to bonuses for executives at private financial companies, but has been silent on comparably large bonuses for officials at Fannie and Freddie, according to the report, released Wednesday by House Oversight and Government Reform Chairman Darrell Issa (R-CA). The …
When Bank of America announced a new $5 debit card fee in late September (along with a slew of other banks), President Barack Obama condemned it, and yesterday some Democrat Members of Congress called on Attorney General Eric Holder to launch an investigation. Unfortunately, they’re setting their sights on the wrong target. Instead of taking banks to task for the new charges, they should focus their attention on the “Durbin Amendment” to the Dodd-Frank financial regulatory reform law, authored by Senator Dick Durbin (D-IL). This week, five House Democrats sent a letter to Holder …
Federal Reserve chairman Ben Bernanke has delivered yet another ominous prediction about Dodd–Frank fallout, telling the Senate Banking Committee last week that government dictates on debit card fees “could result in some smaller banks being less profitable or even failing.” Although not the first to recognize the problem, the Fed chairman’s remarks certainly strengthen the case for eliminating the ill-conceived “swipe fee” regulations. The fees (a.k.a. “interchange fees”) refer to bank charges paid by retailers to process debit card transactions. At the urging of some of the nation’s biggest retailers, …
A whopping 62 percent of Americans now say the United States is on the wrong track, yet President Barack Obama and liberals in Congress continue to steer the country in the same downhill direction toward bigger government. That runaway train picked up more speed this morning, as a House-Senate conference committee came to a final agreement on a Wall Street reform bill that’s packed with $19 billion in new taxes and fees on banks (which consumers will end up paying), a new consumer-unfriendly Consumer Financial Protection Bureau, and a complete …
According to a Reuters report, French economy minister Christine Lagarde today applauded President Obama’s call for more regulation of the U.S. financial sector. “I am delighted that [the] president of the United States is following our lead,” she added. In a possibly related story, the Dow Jones yesterday dropped by 213 points, the largest one day drop since last October.
It is fun and politically profitable to attack banks and bankers, especially in the wake of a bailout program estimated to have cost American taxpayers some $150 billion. Given this, the plan floated yesterday by the Obama Administration to charge a “fee” (read tax) on financial institutions to cover losses under the TARP program is understandable. That doesn’t make it sensible. The plan will do nothing to force those responsible for much of TARP’s losses — primarily AIG, General Motors, and Chrysler – to reimburse the Treasury one cent. That …
A top story in the Washington Post last Saturday concerned Chinese banks. It was badly misleading, to the point of almost seeming intentional. The article leads with the claim that “new lending by Chinese banks has injected $1.3 trillion into the world economy.” That is the figure injected into the Chinese economy, for the benefit of Chinese producers. These producers then ramp up output, pushing out more exports and, at home, displacing foreign imports. At the moment, this probably harms the world economy. The small fraction of Chinese lending that …
After months of internal debate, President Obama today released his much-anticipated plan for reforming the nation’s financial regulatory system. The 85-page document is nothing if not comprehensive, containing a grab bag of changes covering almost every aspect of the troubled financial industry. Taken as a whole, the changes would trigger the largest increase in government intervention in the sector since the Great Depression, to the detriment of consumers. What’s worse, the proposed changes are unlikely to resolve the real problems facing the industry. Among the key provisions of the plan: …
Yesterday, the Treasury Department announced that 10 financial institutions had been cleared to return their TARP bailout money — totalling some $68 billion to the government. This is good news — taxpayers are finally getting some of their money back, and banks look to regain their independence, putting the threat of Detroit-like nationalization behind them. Still, not everyone is happy. There’s been quite a bit of hand-wringing over whether these institutions really are healthy enough to return their money. But — while no one is saying the financial system is …
In the weeks leading up to last week’s release of “stress test” results, there was quite a bit of talk about more bailout money for troubled banks — how much they would need, and how much Washington would force them to take. (Yes, force.) How things have changed. Not only did almost half of the examined banks get a clean bill of health coming out of the tests, but most others came within striking distance of officially-determined stability. Since then, there has been a virtual prison break by TARP-indebted banks …
