Banks Remain Absent from Debt Ceiling Debate, Why?

NewImageOver the last few weeks, banks have more or less remained on the sidelines in terms of the debt ceiling debate.

Industry representatives told American Banker that they don’t have the political clout to advance a solution and “fear advocating for a particular plan could open them up to criticism or reprisals, such as tax increases.”

As both sides of the aisle continue to argue over how to extend the debt limit before the August 2nd deadline, banks are waiting by the sideline and keeping their fingers crossed on the sideline, rather than risk undercutting negotiations at the last minute.

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“I wish this was the days where we could run up to the Hill and we could scream and people would listen to us, but sometimes people don’t care what we think,” said one lobbyist for a large bank, who spoke on condition of anonymity with American Banker. “The people that need to be convinced that raising the debt ceiling is important don’t like big, Wall Street banks.”

Why Banks Are Keeping a Low Profile in the Debt Debate

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  • What contradictions!! 
     
    For example, “Industry representatives told American Banker that they don’t have the political clout to advance a solution and ‘fear advocating for a particular plan could open them up to criticism or reprisals, such as tax increases.’”  Then the article states:  “‘I wish this was the days where we could run up to the Hill and we could scream and people would listen to us, but sometimes people don’t care what we think,’ said one lobbyist for a large bank.”
     
    So let’s see bankers are afraid of reprisal from people who do not care what they think.  Is this sort of like the old statement about being paranoid:  “Just because I am paranoid does not mean someone is not out to get me?”  You know kind of like:  “Even though no one cares what we think, if we speak there will be reprisals?”
     
    With these kinds of reactions perhaps it is better if no one hears from the American Bankers Association.  In this debate, bankers seem to have determined that they are far worse than useless.  Soon the members of this ABA will be afraid of their own shadows IF they are not there already. 
     
    Going into a shell because of fear literally helps no one.  Despite its disgraceful, miserable, and ultimate failure in the Madoff mess, FINRA is still in the game fighting while bankers want to stay in their water closets and hide for fear of taxes and most likely spiders somewhere in the Capitol that could be there lurching for the chance to bite them or their lobbyists.  Even the cowardly lion went to the Emerald City; bankers do not seem willing even to try.

  • What contradictions!! 
     
    For example, “Industry representatives told American Banker that they don’t have the political clout to advance a solution and ‘fear advocating for a particular plan could open them up to criticism or reprisals, such as tax increases.’”  Then the article states:  “‘I wish this was the days where we could run up to the Hill and we could scream and people would listen to us, but sometimes people don’t care what we think,’ said one lobbyist for a large bank.”
     
    So let’s see bankers are afraid of reprisal from people who do not care what they think.  Is this sort of like the old statement about being paranoid:  “Just because I am paranoid does not mean someone is not out to get me?”  You know kind of like:  “Even though no one cares what we think, if we speak there will be reprisals?”
     
    With these kinds of reactions perhaps it is better if no one hears from the American Bankers Association.  In this debate, bankers seem to have determined that they are far worse than useless.  Soon the members of this ABA will be afraid of their own shadows IF they are not there already. 
     
    Going into a shell because of fear literally helps no one.  Despite its disgraceful, miserable, and ultimate failure in the Madoff mess, FINRA is still in the game fighting while bankers want to stay in their water closets and hide for fear of taxes and most likely spiders somewhere in the Capitol that could be there lurching for the chance to bite them or their lobbyists.  Even the cowardly lion went to the Emerald City; bankers do not seem willing even to try.

  • Cynic,
     
    Well said! That is exactly what was going through my mind while reading the article. This is just the latest example of cowardice by the banks.
     
    At some point you have to stand up to the school yard bully instead of just hiding with your ball and waiting for him to leave. Take a stance instead of cowering in fear and hoping to ride it out. It may be too late.  
     

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