Limiting what assets banks can hold will make them riskier, not less risky. Restricting their size ignores why they are the size they are and will make them less efficient. Anyway, Bloomberg is angry
Bloomberg Hammers Obama, Congress Over Bank Plan
Mayor Says President's Idea To Limit Size And Investments Will Lead To Big Problems For NYC, Including Layoffs
Hizzoner Suggests Salaries Of D.C. Lawmakers Be Held Back For Decade
President Barack Obama's demand Thursday that Congress clamp down on the size of banks and their investments got major blowback from New York City Mayor Michael Bloomberg, who said it could cause layoffs and hurt the city.
It's a clash between the president and the mayor. President Obama wants to whittle away at the size of the financial services industry.
"The American people will not be served by a financial system that comprises just a few massive firms," the president said.
But Mayor Bloomberg said the banks and Wall Street are part of the bedrock of the city's economy, and efforts to slash their business just means less tax revenue for the city, which brings up the dreaded "L" word. . . .
The mayor was so upset about the move -- and a suggestion that Wall Street bonuses be put in escrow, which means the money wouldn't be spent here, wouldn't help the city economy -- he responded with a proposal of his own for members of Congress. . . .
"Maybe we should hold back their salaries for a decade or so and see whether the laws they pass work out," Bloomberg said. . . .
Mayor Bloomberg also said that limiting the size of banks will hurt their competitiveness in the global economy.
Labels: Economy, Regulation