Monday, July 12, 2010

The Kanjorski Surprise

Simon Johnson wrote The Kanjorski Surprise – Now It Gets Interesting "The bank lobbyists, it turns out, missed one.  They and their congressional allies were able to gut the Volcker Rule, the Lincoln Amendment, and almost everything else that could have had a meaningful effect on the industry. But, as I point out in a Bloomberg column today, they couldn’t get at (or didn’t sufficiently understand?) the Kanjorski Amendment...Kanjorski gives federal regulators the power and the responsibility to limit the activities or even break up big banks if they pose a “grave risk” to the financial system."


Anonymous said...

Kanjorski Surprise?

There is no Kanjorski surprise.

Does anyone think for one moment that Wall Street, and their thousands of lobbyists, and their hundreds of lawywers, not to mention their lawyers' lawyers, were not fully aware of the Kanjorski amendment.

The Kanjorski amendment is still in the legislation because Wall Street doesn't care if it still there.

Somehow, Wall Street managed to have removed from the legislation:

Direct taxes on Banks
Open markets for derivatives Stronger capitol requirements

among many other things I'm sure, but somehow they all missed the Kanjorski amendment.

I don't think so.....

Obviously, giving additional powers to regulators in the manner of the Kanjorski Amendment, poses no concern for Wall Street. By the time that a "Grave Risk" is identified, it would be like Sept. 2008, all over again. The taxpayer would get shafted, yet again, in order to bailout the failed banks, and the Banksters would, yet again, get to walk away with billions in bonuses (145 billion in 2009) based on fraudulent accounting and government subsidies.

Until prosecutions are brought for the fraud that was perpetrated by these financial criminals, nothing changes.


Richard said...

Tiny Tim makes a good point, though I have less concern with realizing too late that there is a problem with whether someone in the Fed would have the political will to actually break up a bank which poses a system risk.