Newswire

From September 2010 the OMFIF Newswire was integrated into the bi weekly OMFIF Commentary and complimented in late December 2010 by the OMFIF blog.

Revolving door still open between Washington and Wall Street

For all the rhetoric against Wall Street emanating from Washington, the door remains open for bankers to take top government posts.

Given the genuine hostility to Wall Street among voters, however, it is another sign of political tone-deafness at the White House that it wants to appoint a former Citigroup executive as budget director and, reportedly, a Morgan Stanley executive to replace him as chief operating officer at the State Department.

US President Barack Obama’s nominee to replace Peter Orszag at the Office of Management and Budget (OMB) is Jacob Lew, who was COO at Citi’s alternative investments unit prior to joining the State Department in 2009.

Admittedly, most of Lew’s career was spent in Washington as a legislative aide on Capitol Hill, as well as a stint as OMB director during the Clinton administration.

However, Lew swam into treacherous waters at his confirmation hearings last week when he responded to one question by saying he did not think deregulation was one of the causes of the 2008-2009 financial crisis. It is now part of the conventional wisdom in Washington and a recurring theme in Obama’s speeches that it was in fact the relaxing of rules a decade ago that paved the way for the crisis.

“My sense is … that the problems in the financial industry preceded deregulation,” Lew said. “I don't believe that deregulation was the proximate cause.”

Lew, who was one of the top economic officials overseeing financial deregulation under Clinton and who would be responsible for vetting new financial regulations if confirmed again to the budget post, tried to hedge his testimony last week by saying he was not really an “expert” in these questions.

Meanwhile, news reports named Thomas Nides, chief operating officer at Morgan Stanley, as the likely nominee to succeed Lew as deputy secretary of State. While Nides also has a background in politics, he is currently chairman of one of Wall Street’s main lobbying groups, the Securities Industry and Financial Markets Association, in addition to his Morgan Stanley post.

 

Issue Articles

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Issue No: 32 - 22 September 2010

Issue Select: 22 Sep 201015 Sep 201008 Sep 201025 Aug 201011 Aug 201028 Jul 201014 Jul 201030 Jun 201023 Jun 201016 Jun 201009 Jun 201002 Jun 201026 May 201019 May 201012 May 201005 May 201028 Apr 201021 Apr 201014 Apr 201007 Apr 201031 Mar 201024 Mar 201017 Mar 201010 Mar 201003 Mar 201024 Feb 201017 Feb 201010 Feb 201003 Feb 201027 Jan 201020 Jan 201013 Jan 2010

Revolving door still open between Washington and Wall Street

For all the rhetoric against Wall Street emanating from Washington, the door remains open for bankers to take top government posts.

China takes more baby steps toward currency convertibility

China continued to set the traces for further convertibility of its currency by reportedly selling renminbi-denominated bonds to central banks in Malaysia and other Asian countries.

Libyan sovereign fund stake leads to Profumo ouster at UniCredit

A 2.6% stake in UniCredit held by Libya’s sovereign fund became the wedge used by political opponents to oust chief executive Alessandro Profumo.

Probe results won't end ‘flash crash’ debate

US regulators investigating the ‘flash crash’ that sent stock prices plunging last May have determined that no individual deliberately tried to disrupt the market.

UK city explores asset sales to Middle East sovereign funds

The UK’s second-largest city, Birmingham, has reportedly been in talks with sovereign funds in Abu Dhabi and other Middle Eastern countries about a possible sale of its airport and other city assets.