If you think Wall Street has cured itself of its greedy and corrupt habits since the 2008-09 financial crisis, think again, says
MarketWatch columnist David Weidner.
"If anything, bankers and brokers defiantly have hardened in their quest for bigger and bigger paydays," he writes.
"Why be safe when you can bet big and get rich?"
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Weidner cites several developments of just the last week for prove his point:
- "A trader convicted of fraud [currency trader John Rusnak of Allied Irish's U.S. division] cited his bank's bonus culture as motivation behind his crime.
- "A major investment bank [Barclays] was accused of failing to live up to its own promise to root out cheaters from its trading systems.
- "Three powerful, too-big-to-fail institutions [Credit Suisse, Citigroup and Pimco] have ramped up the use of risky derivatives to goose returns."
Maybe regulators are going overboard, and everything is really ok, Weidner says. "Or maybe Wall Street is again playing fast and loose with the stability of the financial system," he notes, adding that the latter is probably a safer bet.
"What we're seeing is a pack of wild dogs that continue to use any means necessary to line their pockets no matter the fines, convictions and settlements that regulators throw at them."
Meanwhile, Harvard economist Martin Feldstein and Council of Foreign Relations Co-Chairman Robert Rubin question the Federal Reserve's claim that its "macroprudential" policy — i.e., regulatory powers — will be sufficient to prevent another financial crisis.
"First, since a wide range of assets and asset holders are involved, current tools are not nearly as broad and comprehensive as the existing range of systemic risks," they write in
The Wall Street Journal.
"Second, the situations are complex, making the design of an appropriate regime complicated and time consuming. Third, it might take considerable time for the FSOC and the relevant agencies to reach a decision to act."
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