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The FDIC chairman, Sheila Bair, spoke at the American Banking Association's Government Relations Summit this morning. The full text of her remarks can be found here. I encourage you to read the whole thing, but I found some highlights worth noting:
My reading of recent polling data on how the public views banks also speaks to the need for a different approach from your industry. In April 2010, a Pew Research poll found that just 22 percent of respondents rated banks and other financial institutions as having “a positive effect on the way things are going in this country.”
This was lower than the ratings they gave to Congress, the federal government, big business, labor unions, and the entertainment industry. Even though Americans remain skeptical about government control over the economy, an April 2010 poll conducted by Pew Research found that some 61 percent of respondents supported more financial regulation, virtually unchanged from the spring of 2009.
bold added by diarist. What a hoot! More interesting observations below the fold.
If you narrow the focus of the questions just to Wall Street firms, the results are even more striking. In a Harris poll conducted in early 2010, some 82 percent of respondents agreed that “recent events have shown that Wall Street should be subject to tougher regulations.” Despite perennial concerns about the government’s role in the economy, only 25 percent of investors polled by Gallup earlier this month agreed that “new financial regulations” were doing a lot to hurt the investment climate.
Imagine that! Investors think financial regulations help! But here's the clincher:
the biggest long-term risk to the success of the banking industry would be its failure to support the reforms needed to ensure long-term stability in our financial markets and our economy.
It is interesting to note that Bloomberg's take on this lecture does not pick up on this warning tone. Rather, Bloomberg emphasizes the FDIC's approach to regulating community banks:
The Federal Deposit Insurance Corp. will try to be sensitive to the needs of community lenders worried that the Dodd-Frank regulatory overhaul will harm their businesses, FDIC Chairman Sheila Bair told bankers today at a conference in Washington.
Talk about missing the boat.
Originally posted to bubbanomics on Wed Mar 16, 2011 at 12:56 PM PDT.