NEW YORK (
) -- Financial industry heavyweights like
Bank of America
are back in the Congressional crosshairs.
Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, is planning to introduce a bill as early as this week that would give the government new emergency powers to take control of banks and financial services companies, according to
The New York Times
The legislation would let the government oust management, change the terms of loans and "wipe out shareholders," the newspaper reported, citing a senior official in the Obama administration.
The idea seems to be that if a bank is too big to fail, then it should be as easy as possible for the government to intervene in troubled times.
This kind of lawmaking only works as a knee-jerk reaction to a crisis, when Republicans and Democrats are equally panicked and looking for a big win for the people to shore up their political ambitions. That's how we got the Sarbanes-Oxley Act in 2002, after the collapse of Enron and other accounting scandals that stoked a bipartisan rush to regulate.
This time around, things are returning to "normal" so quickly that the urgency already seems lost.
For all the talk about reining in the megabanks, recent earnings reports from
and other bailout recipients show that they are bigger than ever, in part due to the merger mania that the government encouraged in the early days of the financial meltdown.
Ordinarily, big profits at big banks might give regulatory reformists some amunition, but at this point in time the earnings seem more like a welcome sign that the financial crisis may be over.
The desire for normalcy and a return to the good old days may now be a more powerful political force than the desire for change.
When you see the likes of
setting aside billions of dollars for bonuses, you know that that the bankers aren't too worried about "reform."
This legislation is too much, too late. In fact, I'd say it's too big to pass.
--Written by Glenn Hall in New York.
Glenn Hall is the New York-based Editor in Chief of
. Previously, he served as deputy editor and chief innovation officer at
The Orange County Register
and as a news manager at
in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at
in Fort Wayne, Ind. His work also has been published in a variety of newspapers including
The Wall Street Journal
The New York Times
International Herald Tribune
. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.