As reported by Inner City Reporter’s Bank:
http://www.innercitypress.org/bankbeat.html
March 30, 2009
Geithner Promotes Megabanks’ Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives
Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis
NEW YORK, March 28 — Seven megabanks’ renewed grab for monopoly power in the over the counter derivatives market shows how little Wall Street’s real power has changed in the transition from the Bush to Obama administrations.
The banks, including Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank, are paying over $1 million to p.r. firm Prism Public Affairs to “educate” the voters weary of bonus and bailouts that those who caused the crisis should benefit from it.
Already, Congress members hungry for campaign
contribution have submitted to closed door briefings by
Ed Rosen of the law firm Cleary Gottlieb, who drafted
the legislative language for monopoly.
The connector in this story is Timothy Geithner, under Bush the president of the Federal Reserve Bank of New York and now Obama’s Treasury Secretary. Geithner in June 2008 convened closed door meetings with 17 banks, essentially allowing them to propose and draft their own rules for the derivatives market.
This led to advocacy by the Fair Finance Watch that Geithner’s meetings were in fact rule making that excluded the public in violation of the Administrative Procedure Act, and by Inner City Press, as media, to get the meetings opened to journalists and the public.
The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engaged in rule-making, it must provide notice to the public, and allow and weigh public comments. The New York Fed under Geithner tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies these processes. The New York Fed on June 9, 2008 met with a group of the largest banks to discuss, according to the Geithner himself
“Regulatory policy. These are the incentives and constraints designed to affect the level and concentration of risk-taking across the financial system. You can think of these as a financial analog to imposing speed limits and requiring air bags and antilock brakes in cars, or establishing building codes in earthquake zones. Regulatory structure. This is about who is responsible for setting and enforcing those rules. Crisis management. This is about when and how we intervene and about the expectations we create for official intervention in crises.”
Press accounts made clear that the financial instruments and regulatory issues discussed behind closed doors are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color — subprime and predatory mortgages.
The financial institutions invited, in mid 2008, were:
Bank of America, N.A. – Barclays Capital – BNP Paribas – Citigroup – Credit Suisse – Deutsche Bank AG – Dresdner Kleinwort – Goldman, Sachs & Co. – HSBC Group – JPMorgan Chase – Lehman Brothers – Merrill Lynch & Co. – Morgan Stanley – The Royal Bank of Scotland Group – Societe Generale – UBS AG – Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein – BlueMountain Capital Management LLC – Citadel Investment Group, L.L.C.
Fast forward to March 2009, with Geithner despite tax evasion installed as Obama’s Secretary of the Treasury, and with Lehman having failed and Wachovia been swallowed by Wells Fargo. Now he is promoting monopoly powers in the market for an even smaller group of banks, just seven: Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank — which despite European headquarters received billions of dollars in U.S. Troubled Assets Relief Program bailout funds through AIG.
Now the idea is to formalize the monopoly through legislation, not rule making. Industry friendly Congress people like Connecticut’s Chris Dodd are supporting the monopoly for the privileged. The fig leaf policy argument is that derivatives should runs through regulated banks. The push is made now, before it is formalized that non-banks, too, are regulated. It is a pure power grab, with Timothy Geithner as the connector. And who is fighting this monopoly of the morally if not financially bankrupt? To be continued.
March 23, 2009
Citigroup‘s Pandit put out this spin last week, “The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees,” Mr. Pandit wrote in a memo distributed to Citi’s 300,000 employees.
Bank of America‘s Ken Lewis claims that B of A is “part of the solution for the financial crisis” through its subsidized acquisitions of Countrywide Financial and Merrill Lynch. Most say, part of the problem…
March 16, 2009
In DC, “Inevitable” Fraud as Obama Jokes with JPM Chase, Meets Citi and ExxonMobil
Byline: Matthew Russell Lee of Inner City Press
WASHINGTON, March 12 — As President Barack Obama promises to find and “call out” misuses of the stimulus package, and to review the over 7,000 earmarks in the budget bill he signed this week, the chairman of his Recovery Act’s Transparency and Accountability Board, Earl Devaney, told the Press of a “naive impression that given the amount of transparency and accountability called for by this Act, no or little fraud will occur… some level of waste and fraud is unfortunately inevitable.”
Accordingly, the same is true not only at the United Nations — despite Obama not mentioning the need for UN reform in his comments Tuesday after meeting Secretary General Ban Ki-moon — but also with the bank bailout funds of the Troubled Assets Relief Program. Nevertheless, Obama joked with JPMorgan Chase‘s Jaime Dimon at the Business Roundtable’s gabfest Thursday in Washington. As a smaller banker asked the final question of Obama — no questions were taken after his meeting with the UN’s Ban — Obama said that banking has of late become complex, and that he could ask “Jaime” about it.
Also on the White House’s list of Roundtable attendees was Citigroup’s longtime board member and now chairman Richard Parsons. Citigroup veered into predatory lending, JPM Chase at a minimum securitized it, while lending to payday lenders and pawnshops. What then is so funny?
Obama’s successor as Senator from Illinois Roland Burris is said to have a brother who is going through foreclosure. A well-known Representative from the state of Illinois, sponsoring a pro-industry payday lending bill, has taken over $10,000 from the lender QC Holdings. If this is how politics will be in the current Washington, predatory lending can be expected to continue.
http://www.innercitypress.org/bankbeat.html
Timothy Geithner is connected to the Group of 30. So is Paul Volker, and Larry Summers. Members of Group of 30 list HERE:
The Group of 30 gets contributions and support from those listed HERE
All the banks listed above are included as well as the People’s Bank of China.
Of IMPORTANT NOTE: Zhou Xiaochuan, the Governor of the People’s Bank of China is a member. Is this why Geithner spoke so fondly of Zhou talking about a World Currency in place of the US dollar?
http://www.group30.org/bios/members29.htm
Democrat or Republican…..it does not matter to the Bildeberg Group or the Trilateral Commission. The Federal Reserve and the IMF are working for a One World Governance…..the groundwork has been laid and we are speeding toward their planned “end”…….
Obama connected to George Soros……Soros and his Open Society dreams…..will we see Soros’ dreams come to fruition?
