Stirred up by union activists in Chicago, protesters picketed the offices of Goldman Sachs (NYSE: GS) and Wells Fargo (NYSE: WFC), and then went to the Sheraton hotel, where the annual American Bankers’ Association convention was held to protest there as well.
Holding placards of the faces of a number of banking leaders like “wanted” signs, and calling them “Wall Street Robber Banker[s],” the crowd chanted things like “shame on you” at Goldman Sachs, and asked to meet with CEO Lloyd Blankfein sometime in the next month.
No representatives had any comment concerning the protests from Goldman or Wells Fargo, other than they each had received letters from the protesters.
As far as those bankers attending the conference, they said they refused to enter into any type of false humility and were united on that front, while refusing to accept blame for the economic crisis we now face.
Members of the ABA account for about 95 percent of the overall banking industry’s $13.3 trillion in assets. Along with many of the major banks in America, thousands of regional and local banks are also part of the organization.
With a lot of confusion and lack of knowledge of the banking industry by Americans, ABA chairman Arthur Connelly attempted to distance the members of the association from financial institutions like Goldman Sachs and Morgan Stanley (NYSE: MS), which don’t belong to the ABA, and he added, buy many aren’t really considered banks at all.
Connelly added that “Traditional banks are the solution to getting this country back on track. Harming our industry harms the American economy.”
Most Americans aren’t sophisticated enough to understand the difference Connelly is trying to make between traditional banking and Wall Street banking, and so it’s going to be hard to make that point stick, even if there is some truth to it. Many small American banks have failed, and many more will, but the bailout of the huge banks would have easily dwarfed all of them combined, so there’s a point to be made in that regard.
Most specifically the idea proffered is that the majority of problems cited for the downfall, which was the packaging of mortgages and disastrous derivatives, were put together by investment firms on Wall Street and not the local banks. Wall Street banking executives are also the ones receiving the huge bonuses while collecting bailout dollars from taxpayers, another thing pointed out by the bankers attending the conference.
Consequently, the members of the ABA believe they’ve been blamed for a number of things they weren’t responsible for.
The major problem in all of this is the complexity of the banking system as it exists today and the inability of its leaders to communicate at a level the public can understand as a result of that.
Variables in the industry are so interconnected and intertwined, that it becomes almost impossible to talk about one element or another of the banking industry without bringing in numerous others.
All the general public understands is the huge banks were bailed out, they’ll be paying for it for years, bankers’ bonuses continue to be huge, overdraft fees have been excessive, and credit card interest rates are being increased in attempts to thwart regulatory restraints that have yet to be put into practice.
This means it’ll be quite some time before bankers will be trusted by the public, and the responses of banks to the current economic climate will determine the depth and length of time of that mistrust.