Banks Admit They Don’t Intend to Lose Profits to Regulation
In an early roll-out of what is likely to be part of the financial industry’s regulation-busting public relations strategy, JPMorgan Chase analysts issued a report stating that any government efforts to prevent future financial meltdowns will cost them money. Naturally, they have no intention of losing a cent of the profits they planned to make by being undercapitalized and engaging in trading activities to the detriment of their depositors, nor will they pay a cent more in taxes to cover the losses to taxpayers for the various bailouts.
So how do the banks plan on covering the cost of making themselves stable and taxpayers whole? Why, by raising fees, of course!
“In order to return to similar levels of profitability as per current forecasts, we estimate that pricing on all products (retail banking, commercial banking and investment banking) would have to go up by 33 percent,” [JPMorgan head of research Nick] O’Donohoe said.
Despite the fact that the biggest proposed tax doesn’t come anywhere near one-third of profits, despite the fact that “increased capitalization” only means they need to have enough money around to prevent abject failure, and despite the fact that, in the days before banks were allowed to engage in both retail and investment banking, fees for services were actually lower, those legal changes will result in a one-third fee increase for customers.
It sounds like banks are just trying to use the specter of fee increases to scare consumers out of wanting reform — and, if that doesn’t work, they’ll use those increases to fund even higher profits than they would have generated without regulation. No wonder nobody trusts their bank anymore.