Larry Doyle, an ex-mortgage-backed securities trader, is saying in his new book that Wall Street owns Washington, big banks must be broken up, and investors are ill served by regulators. Doyle blames it on a conspiracy among Wall Street firms, politicians, and regulators, arguing that the system is broken. Strangely enough, he thinks most people on Wall Street are honest.
On other matters, Doyle said on the show:
- The “enormous problem” of the revolving door between regulators and top firms is a door “That should be shut;”
- The culture of Wall Street has changed from the late 1990’s with the emphasis switching from providing service to a zero sum game that favors firms over investors;
- Major firms almost have de facto immunity from prosecution in money laundering cases especially if they’re large enough to cause massive disruptions if the government cracks down hard on them and individuals. “We’ve got criminal behavior behind this stuff and it’s ongoing;”
- And this leads to his most controversial point: “We need to break up the banks for the health of our economy and nation.”
The radio interview covered a wide range of issues but Doyle’s prescription consists of more transparency, appropriate regulations carried out by “real regulators,” and whistleblowers, he said. Law enforcement and regulators “should embrace whistleblowers who would bring the information and the evidence,” he said on the show. “What has happened to all too many whistleblowers? They’ve been ignored, intimidated and fired.”
Doyle’s view is stark and yet it’s difficult to argue against it. Recent scandals underscore how little some firms have learned from the Great Recession. But all is not lost. Doyle says that Wall Street is not riddled with crooks as the “The Wolf of Wall Street” would have us believe.
“That movie did Wall Street an enormous disservice,” Doyle said during the radio interview. “Overwhelmingly, I would maintain that most people on Wall Street are good people trying to make an honest living. In my opinion, the system is broken.”
Fixing the system, starting with the break-up of the banks that are too big to fail is far more aggressive than the Dodd-Frank reforms and there is little political will to embark upon seismic shifts in financial services. That is until we face another Wall Street crisis, which Doyle said is likely given current circumstances.
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