Thursday, Jul. 01, 2010
Big Banks
Issue
The White House sought to bar banks that receive Federal Reserve support from trading for their own gain. Three megabanks — JPMorgan Chase, Morgan Stanley and Goldman Sachs — stood to lose up to $4.5 billion a year in potential profits
Pressure
Those three banks, which have invested $15.4 million in lobbying since the beginning of 2009 and have given $2.6 million so far in 2010 campaign contributions, publicly opposed the rule with other firms and worked to soften the language
Payoff
House and Senate negotiators agreed to allow the banks to invest up to 3% of their capital in private-equity and hedge funds. Analysts estimate that this will reduce their annual lost profits to $1.6 billion, a savings of about $2.9 billion