Robert Reich: Wall Street’s Global Race to the Bottom

[Better Believe It]

Wall Street’s Global Race to the Bottom
By Robert Reich
October 4, 2010

Wonder what’s happening with bank reform? Watch your wallets.

Having created giant loopholes in the Dodd-Frank law recently passed by Congress (keeping “customized” derivatives underground, for example), fighting off attempts to cap the size of the biggest banks, and keeping capital requirements relatively modest, Wall Street is now busily whittling back the rest through regulations.

Squadrons of lawyers and lobbyists are now pressing the Treasury, Comptroller of the Currency, SEC, and the Fed to go even easier on the Street.

Their main argument is if regulations are too tight, the big banks will be less competitive internationally. Translated: They’ll move more of their business to London and Frankfurt, where regulations will be looser.

Meanwhile, Wall Street is warning Europeans that if their financial regulations are too tight, the big banks will move more of their business to the US, where regulations will be looser.

So the race to the bottom is now official. Wall Street will set up its casino wherever financial gambling is least regulated.

Read the full article at:

http://robertreich.org/post/1245725732

[OHdem10]

1. Just as the Multinationals roam the world seeking the cheapest

labor, so goes Wall Street seeking the place less regulated.

And the Republicans will continue these policies to the destruction
of the middle working class. "I need the vapors, I need the vapors".

[pampango]

2. Playing the US and EU off against each other has one obvious solution.

Coordinate tightening regulations on big banks in both places. We coordinate lots of policies with the EU and others. No reason we can't do it here, too.

If the big banks threaten to abandon both markets (the biggest financial and consumer markets in the world), call their bluff. Something tells me there's too much money to be made in both places for big banks to relocate to Manila or Abu Dhabi.

[dixiegrrrrl]

3. so let them move.

Plenty of business for honest local banks.
big banks can and do their business from anywhere.
Between customer boycotts and the now collapsing mortgage bond business,
the banks are getting some well deserved knocks.