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It is a Threat, Not a Veiled Threat

"The industry’s response to regulatory reform often sounds like a veiled threat – rein us in too much and we will stop lending and strangle the economy.  All that this attitude will accomplish is for the banking sector to be seen as an extortionist instead," says an Op Ed in today's Financial Times by Martin Sandbu.  

Of course, it doesn't just "sound like a veiled threat."  It is a threat and it isn't just seen as "extortionist."  It is extortion (even if not in the narrow legal sense).  (See prior blog post:  "Bank Extortion and Hostage Taking Continues.")

While being slightly off on these observations, Mr Sandbu hits most of the others dead on, including importantly his primary conclusion: "It is imperative that the industry, in particular, begins to assume th[e] responsibility" of proposing "solutions that will meet people’s concerns."

As he notes, "Banking is already well on its way to being seen as a parasite on the economy, as it has been many times in the past....  With new rounds of bail-outs looming, bankers above all have much to gain from changing their tune."

The question he really raises is when, if ever, will a statesman emerge from the financial industry, one with dirt on his hands, who steps forward and risks the scorn of his peers and golfing buddies to do the right thing, to admit wrong, to be candid about his industry, to speak out, speak up and be counted by acting against interest and leading in a time of national need. 

Read the full Op Ed here.

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