With the Comptroller of the Currency and the Chairwoman of the FDIC championing large and local banks respectively, I gotta ask who's representing the citizenry? And if you say both, I will have to challenge you to a duel over the insult to my intelligence...say, Glocks at ten paces in a national park.
Regulators Feud as Banking System Overhauled
By STEPHEN LABATON and EDMUND L. ANDREWS
WASHINGTON — Two of the nation’s most powerful bank regulators were once again at each other’s throats.
At a public meeting three weeks ago, John C. Dugan, the comptroller of the currency, blasted a proposal to impose stiff new insurance fees on banks as unfair to the largest banks, which he regulates. The financial crisis stemmed in part from problems at small banks, he insisted.
Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation and the regulator for many smaller, community banks, could barely hide her contempt. The large banks, she said, had wreaked havoc on the system, only to be bailed out by “hundreds of billions, if not trillions, in government assistance.” She added, “Fairness is always an issue.”
Behind the scenes, the two regulators have been clashing over a host of issues, officials said, be it the administration’s coming regulatory overhaul or Ms. Bair’s campaign to shake up the top management at Citigroup.
The long-running and deeply personal feud between Mr. Dugan and Ms. Bair, two Republican holdovers with similar career paths in Washington, is now helping to shape President Obama’s attempt to revamp financial regulation aimed at preventing the regulatory lapses that contributed to the economic crisis.
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Its not Walmart vs Mom and Pop
Too often in this debate people pretend that the large banks are walmart and the small banks are the defenceless, mom and pop stores that have their honest business overrun by dishonest corporations. In reality, small banks do increidbly stupid things, like Kansas banks taking your money and investing in beach real estate, using their customers 401ks as the downpayment to give poor people cheap loans at high interests. Were in interconnected country and small banks are businessmen, they invest where the money seems to be. Large banks on the other hand hire entire staffs of people to assess risk, clear their books at appropriate times, and generally only invest in large, stable products. Only a few of the larger banks took part in subprime, as is evidenced by the renunciation of government debt by some of the larger banks so early in the recovery process. Small banks made bad investments, insured it with people like AIG, sold them to large banks, both of which had overseas connections, and crippled the international system. Bair is nothing but a pandering hack, like most republicans nowadays, who comes onto the national stage yelling the usual "big business hurting small business, corporate fatcats eating caviar" bullshit. At least Dugan is a aman who doesn't just say whatever makes him look good, and critically examines the situation.