A surprising new line of argument has emerged: Financial regulation is working, Dodd-Frank is one of the major accomplishments of the Obama administration, and the banks are even “humbled.”
JPMorgan Chase has had to defend its business model, as analysts contend that it should be broken up. Management at Citigroup, which bungled its Federal Reserve mandated stress test last year, is in trouble if it does it again. Compensation for investment bankers at places like Goldman Sachs is down. Goldman and Morgan Stanley are shrinking their balance sheets.
But do Lloyd C. Blankfein and Jamie Dimon seem humbled to you?
No, I didn’t think so. Dimon, the chief executive of JPMorgan Chase, has aggressively defended his behemoth organization. The supposedly hapless Citigroup drowned its sorrows by watching a little bill it wrote pass into law. Congressional Republicans attached the clause to a must-pass spending bill last year to roll back a major piece of derivatives legislation.
Then just the other day, there were reports of yet another price manipulation investigation — after the sweeping interest rate and foreign exchange investigations that have consumed the financial world over the last several years. I actually had to look it up while writing this because I’d forgotten what this one was about. (It’s a look into whether the banks manipulated the price of metals, incidentally).
