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AFR in the News: Politicians In Washington Are Reading Greg Smith’s Letter Too

Submitted by on March 15, 2012 – 8:35 am
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Politicians In Washington Are Reading Greg Smith’s Letter TooAlan Zibel, Siobhan Hughes and Eric Morath (WSJ – subscription required)
March 14, 2012

“Greg Smith’s fiery resignation from Goldman Sachs, as may be expected, touched a nerve of some politicians and political groups, many of whom have been beating a drum not to water down banking reforms. ‘Even after Goldman received a $10 billion taxpayer bailout and paid the largest SEC settlement in history for misleading its investors, it still hasn’t learned the lessons of the 2008 financial collapse, according to this insider,’ said Rep. Elijah Cummings (D., Md.) the top Democrat on the House Oversight Committee. ‘Putting its short-term corporate profits before the interests of its own investors and clients is exactly what helped cause the economic collapse and what continues to corrode Wall Street.’…Asked about the op-ed piece an event in Washington, former Federal Reserve Chairman Paul Volcker said Wall Street’s trading practices, which have grown tremendously in the past 20 years, can ‘lead to a lot of conflicts of interest — and enormous compensation.’…Echoing Volcker himself, Americans for Financial Reform said the rule is aimed ‘precisely’ at the problems Smith alleges, and should provide fighting power from a lobby movement to soften the rule. ‘It is crucial that regulators are not intimidated or overwhelmed by this well-funded effort, but instead move ahead to implement the Volcker Rule that Congress intended – a strong rule that truly changes the toxic culture of proprietary trading,’ the group said in a statement. ‘Smith’s statement today, along with the mountains of evidence from the financial crisis, demonstrates yet again how much we need a Volcker Rule that works.’” Click here for more.

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