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  1. Being “stunned” is just posturing.

    The financial firms and their lobbyists have been at war against regulation since I’ve been reading newspapers. In the 20-year run up to the repeal of the Glass Steagall in 1999 they spent millions campaigning against curbs on their investments, growth and power, calling them “artificial barriers against competition” and called their lobbying mere “efforts to educate.” (Take, as just one example, BofA’s “position paper” in January 2007 — part of a lobbying campaign — against the law barring domestic banks from holding more than 10% of the country’s deposit accounts, which they saw as a constraint against their growing ever larger).

    Congress has been contemplating reimposing safeguards since 2007. In November 2009 Senators John McCain and Maria Cantwell proposed to reinstate a good chunk of Glass Steagall. It was contemplated by others in Congress prior to that:

    “Seven Wall Street lobbyists trooped to Capitol Hill on Nov. 9, hoping to convince Representative Paul Kanjorski’s staff that his plan to dismantle large financial firms was a bad idea. They walked out with a sobering conclusion, according to the accounts of two attendees who requested anonymity because the meeting was private. Not only was Kanjorski serious, he planned to offer the legislation as early as next week — and it just might pass. Today marks a decade to the day that President Bill Clinton signed the repeal of the Depression-era Glass-Steagall Act that split investment-banking from lending and deposit-taking. The repeal allowed the creation of Citigroup Inc., the financial colossus now propped up by $45 billion in taxpayer rescue funds. Financial firms are scrambling to prevent Congress from re- imposing the act. “We’re playing with live ammo,” said Sam Geduldig, a lobbyist at Clark Lytle & Geduldig who represents financial- services firms and wasn’t at the Nov. 9 meeting. “The banking community is rightfully concerned.”

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