So, the CFTC (Commodities Futures Tra…whatever—one of the banking regulators) holds a “public hearing” on derivatives reform and eight people show up. Guess how many of those people are from the banking industry? Now guess how many regular, concerned citizens show up? If you guessed 8 and 0, respectively, you are correct!
The informational hearing for regulators somehow turns into a job interview for banking people. Banking people who are advising regulators about writing the new rules, and who happen to have millions riding on the outcome of those rules.
Here’s the thing. You ask both lobbyists and regulators about this conflict of interest and they will tell you it’s not ideal, but of course it works that way.
“You can’t possibly expect people in the government at all levels to understand all this stuff,” says Tim Ryan, a lobbyist who represents many big Wall Street firms. “They’re not market participants.”
The idea of regulations being written by the very industries being regulated isn’t terribly noteworthy, at least not to those of us who view this sort of collusion between government and business as, well, business as usual (ho ho), but the thing that gets me is how this is described as a “conflict of interest.” What conflict of interest? Seems to me that the problem here is that there’s no conflict of interest.