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Apologies are cheap. But the banks fear genuine financial reform would cost them a bundle if it stopped the use of off-balance-sheet derivatives that have allowed the banks to place big bets with little capital. So even as Wall Street sheds crocodile tears about the terrible things it's done, it is throwing money at Capitol Hill to thwart reforms that would prevent it from continuing to do terrible things.
The political payoffs seem to be working. Proposed legislation from Treasury and the House (at this writing, the Senate Banking Committee hasn't reported out) has loopholes big enough to allow bankers to drive their Ferraris through them. Specifically, they permit secret derivative trading in foreign-exchange swaps (similar to what Goldman used to help Greece hide its debt) and in transactions between big banks and many of their corporate clients (as with AIG).
Before you wallow in hopeless cynicism, though, it's worth noting that we already have a law against this. It's called the Sarbanes Oxley Act of 2002. It just needs to be enforced.
Think back to the corporate looting scandals that came to light almost a decade ago when the balance sheets of Enron, WorldCom, and others were shown to be fake, causing their investors to lose their shirts. Nearly every major investment bank played a part in the fraud -- not only advising the companies but also urging investors to buy their stocks when the banks' own analysts privately described them as junk.
Sarbox, as it's come to be known, was designed to stop this. It requires CEOs and other senior executives to take personal responsibility for the accuracy and completeness of their companies' financial reports and to set up internal controls to assure the accuracy and completeness of the reports. If they don't, they're subject to fines and criminal penalties.
Sarbox is directly relevant to the off-the-balance-sheet derivative games Wall Street has been playing. No bank CEO can faithfully attest to the accuracy and completeness of its financial reports when derivatives guarantee that the reports are incomplete and deceptive.
I was on a panel recently with a former chair of the Securities and Exchange Commission who was asked why the commission wasn't enforcing Sarbox against Wall Street. He had no response except to mumble that legislation is meaningless unless adequately enforced. Exactly. So while financial reform is needed, there's no reason to wait for it. The SEC should immediately go after the big banks' top executives using the tools it was given after the last scandal.