Large lobbying budgets are helping Wall Street investment banks get favorable treatment from regulators at the expense of traditional Main Street banks, alleges Robert Wilmers, CEO of M&T Bank, in a Washington Post editorial.
Consider the $82.4 million spent on lobbying and campaign contributions last year by the 10 largest recipients of the federal Troubled Assets Relief Program funds. Or the $523.6 million that group spent over the past 10 years.
Goldman Sachs alone spent $40.6 million in lobbying and campaign donations in the last 10 years. It spent almost $9 million just in 2008. That’s almost 11 percent more than the Financial Services Roundtable, a trade group for the top 150 financial institutions.
Regulators approved Goldman’s application to become a commercial bank within a week, but took 10 weeks to approve M&T Bank’s proposal to acquire a modest-size bank in Utica, NY.
By becoming a commercial bank, Goldman tapped the Federal Reserve Discount Window. Plus, the FDIC, funded by community banks across the country, has guaranteed $28 billion of Goldman’s debt securities. That equals 10 percent of all funds guaranteed by Temporary Liquidity Guarantee Program.
Only reform of financial regulations can bring economic recovery, Wilmers argues.
Reforms are inevitable, Barney Frank (D-Mass.) said in a speech at the National Press Club. “We invite the financial community to participate with us given what we believe is necessary and how we do it, but it's going to happen one way or the other,” Frank said.
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