Resigned to reform, Wall St tries a different tack in DC
Banks bow to inevitability of reform, take more placatory line with regulators
In March, as US bank regulators were framing a new rule that would affect the US$630 trillion derivatives market, JPMorgan Chase sent five bankers from New York and London to Washington to raise some fine points about the impact of the financial reform.
In a jargon-laden, 23-slide presentation, the JPMorgan bankers walked regulators through the complexities of how their decisions would affect the arcane market, according to documents and a person familiar with the meeting.
On July 2, the US Federal Reserve released the final rule. Of three requests made by JPMorgan - which were backed widely by other banks and lobby groups - regulators rejected the first, adopted the second and split the difference on the third.
The episode highlights the less antagonistic approach Wall Street is taking as it tries to blunt the force of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the 848-page legislative response to the financial crisis. Sunday marks the three-year anniversary of its passage.
Bank executives, lawyers and lobbyists now portray themselves as concerned parties trying to help stretched technocrats, who face the task of writing hundreds of complex rules to regulate high finance.
The current strategy contrasts with the knock-down, drag-out fights that occurred during the legislative process - and even afterward, as bank lawyers battled agencies in court, and lobbyists fought to repeal Dodd-Frank in Congress.
Wall Street today tacitly acknowledges that it can tweak but not undo reforms.
