JPMorgan Chase’s $2 billion trading loss could be even more damaging for President Barack Obama than it was for the bank because it indicates the financial crisis of 2008-09 failed to alter Wall Street’s behavior significantly.
Indeed, not much has changed in the financial community, Politico
reports. No major bankers have been sent to prison. And commissions set up to investigate abuses haven’t accomplished much.
The president was able to push the Dodd-Frank financial reform bill through Congress, but it obviously wasn’t enough to prevent JPMorgan’s reckless bet, Politico points out. And the bank itself is led by a Democrat — CEO Jamie Dimon.
White House officials say they achieved the strongest law they could get through Congress. And the JPMorgan trades might never have occurred if banks weren’t able through their lobbying to water down the regulations coming from Dodd-Frank. Moreover, the higher capital requirements imposed on banks allow institutions like JPMorgan to deal with such losses more easily, administration officials say.
The Obama campaign will attempt to tar likely Republican presidential nominee Mitt Romney with his support for repealing Dodd-Frank entirely, Politico suggests.
But that approach may not work with voters. “The guy in the street in 2008 and 2009 was worried about his or her deposits, and now it’s clear they should still be worried,” Charles Geisst, a Wall Street historian and professor at Manhattan College, told the website.
“An average person looks at this and thinks, ‘What exactly happened here? How could this happen again?’ And they don’t want excuses as to why it happened. They just want it to go away. But it’s not going away.”
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