3 Reasons We Think Wall Street Will Not Listen to Obama

by Minority Fortune

obamabanksPresident Obama issued a statement on Monday urging banks to do more lending and less bonuses. It’s understandable given the amount of money hoarding banks are doing these days in spite of businesses and homeowners in need of loans. However, one has to wonder what effects if any this plea will have on the banks.

3 Signs That They Don’t

The first sign is that three executives at major banking institutions didn’t even bother to show up. The Washington Post reports that Goldman Sachs’s Lloyd C. Blankfein, Morgan Stanley’s John Mack, and Citigroup’s Dick Parsons were absent from the meeting and had to opt for a teleconference instead. Sure, they claimed that fog was the primary reason, but we’re doubtful. Besides, teleconferences is a polite term when actually it just stands for “I hear your voice, but I’m not listening and playing with my Blackberry instead”.

The second sign is that the statement is just that-a statement. The White House should have forced banks into quantifiable results in writing BEFORE giving them bailout money. Most of the banks are beginning to pay back the bailout money, so there remains little leverage.

Lastly, policies have remained unchanged. The financial industry is in need of strict regulation, and the government is allowing free reign amongst them. Furthermore, legislation doesn’t even appear to want to do anything about it. The scariest thing we saw in the Washington Post article was the following:

Meanwhile, the prospects for financial reform legislation have been clouded by the concerns of Senate Democrats that some proposals would unduly suppress financial innovation and limit economic growth, a case the industry has pressed hard to make.

The Senate Democrats seem to be defending the idea of financial free reign. These banks’ lobbyists must have been working overtime to win over Congress, and it’s disheartening for the American people.

So, we sit and await the next threat warning because we’re afraid this will have little impact on the bank’s behavior.

*Image courtesy of REUTERS/Larry Downing.
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