Banking executives at Davos are telling Andrew Ross Sorkin, just between bros, that they don’t plan on taking the Obama administration’s Volcker rule (which will prohibit banks from trading with the life savings of schoolteachers and widows) any more seriously than they ever have, well, any rule, from the Ten Commandments on down. According to Sorkin, “one hedge fund manager described the proposed rule by using more four-letter words in one sentence — as nouns and verbs — than I thought possible.” Virgin ears burning, ARS turned to the next guy for some plain talk.
He got a reply that is almost more shocking, in terms of its naked arrogance:
“I can find a way to say that virtually any trade we make is somehow related to serving one of our clients. They can go ahead and impose the rule on Friday, and I can assure you that by Monday, we’ll find a way around it.
For example, the day the rule was proposed, JPMorgan Chase, Morgan Stanley, and Goldman Sachs, among others, were quick to point out by the afternoon that proprietary trading was only a small percentage of their business (2 percent, 2 percent, and 10 percent, respectively), so, you know, whatever. Those numbers, according to one CEO under the influence of Sorkin’s truth serum, a.k.a. vodka, was kind of maybe exaggerated a little:
As the chief executive of a global bank said to me, knocking back a shot of vodka, “The numbers you’ve heard about don’t include all the investments we make that are related to our clients. Nobody’s talking about that. That’s a much bigger number.”
But it’s not like they were lying, of course. They were business lying. Everyone knows that’s a totally different thing.
Bankers in Davos Seek a United Message on Volcker Rule [NYT]
