Things That Make Me Go “Hmmm”

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In a post about a spat between the United States and Europe over who’s implementing financial reform faster, Felix Salmon says:

In the short term, the biggest winners in any fight between regulatory authorities are always going to be the banks, who will happily arbitrage differing regional regulatory regimes and take advantage of their parents’ squabbles to stay out drinking all night. In the long term, however, even the banks would ultimately prefer a single global regulatory regime with clear ground rules and a level playing field — something which lets them concentrate on their main job, of banking, rather than expending enormous effort on lobbying and loopholes.

Really? In the long term, I’d guess that clear rules and a level playing field are the last thing that big banks want. Lobbying costs are a drop in the bucket to them and produce returns that make Bernie Madoff look like a piker. What’s more, over the past couple of decades big banks have made it crystal clear that they have very little interest in their “main job” and are instead intensely obsessed with bending rules and discovering clever innovations that will make them trillions of dollars in trading profits. “Banking” is for suckers.

This is why simple, blunt rules are best in the financial industry. Sure, they’ll end up being inefficient in some ways and unfair in others. That’s inevitable. But it pales compared to the inefficiency and unfairness of business as usual. Unfortunately, that’s largely what we still have in the aftermath of Dodd-Frank and Basel III. They’re better than the status quo, but they simply aren’t blunt enough to rein in the rocket scientists of Wall Street for long. And that’s just the way Wall Street likes it.

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

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As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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