Big Banks Are Done Being HumbleS

After they took a primary role in making the 2008 global economic meltdown happen, Wall Street's biggest banks listened to their PR advisors and practiced "humility" for a little while. (This means that they continued operating the same way, but sent out a memo instructing employees not to be brash about it.) But now, the stock market is booming again, we're living 2006 all over again, and the big banks have had enough of being pushed around by government regulators who might like to avoid the next huge financial meltdown.

Wall Street banks, for one, think that Wall Street banks have done quite enough penance for that whole "being directly responsible for a global crisis due to wanton greed and recklessness" thing. That was, like, years ago. Can't those persnickety weak-willed government regulators just move on?

For example, lots of people who can do math and who have the most elementary understanding of economic cycles think that banks should be forced to hold more money in reserve so that, when the next crisis hits, they could maybe, you know, have some money to pay their debts with, rather than being caught out there with their pants down and a lonely nickel in their teeth. Wall Street, however, finds this prospect outrageous. Why hold money for emergencies when they could be investing that money in risky assets that will make banks money now and then make the future emergency worse? The WSJ reports that our nation's biggest banks are teaming up to lobby against such outrageous anti-capitalist, pro-common sense assaults on the right of huge financial conglomerates to eventually take taxpayer bailouts for their own mistakes. They're hiring former Bush and Clinton staffers and holding secret meetings and visiting the White House and everything. Their message:

In a Forum-organized meeting the next day with President Obama, a bank official briefly raised concerns about capital levels, saying that banks were under growing regulatory pressure to boost their capital cushions and cautioned it could hinder their ability to lend and affect the broader economy, according to people who attended the White House meeting.

Banks are making a similar pitch in meetings with lawmakers, telling members of Congress that every additional dollar in capital they are required to hold translates into $8 to $10 less to lend, according to industry representatives.

Haha that is because these banks are leveraged many times over which is exactly what makes them collapse so quickly when things go bad, and then they don't hold any money in reserve, which is exactly what lawmakers are trying to change, which is exactly what the banks are trying to not change at all.

America.

[WSJ. Photo: AP]