Although they can put in place any laws and regulations that they see fit, politicians are not in the driver’s seat in their relation with banks. Bankers know more about banking than politicians. Moreover, politicians want the bankers’ cooperation to make the investments the politicians favor — or campaign contributions. When bankers warn that capital requirements will hurt bank lending and reduce economic growth, they are rarely challenged by politicians, not only because politicians do not see through the banks’ claims but also because they do not want to upset their symbiosis with bankers.
JPMorgan
Chase CEO Jamie Dimon, head of the largest bank in the United States,
prepares to testify before the Senate Banking Committee about how his
company lost more than $2 billion on risky trades. June 2012. (AP
Photo/Haraz N. Ghanbari)
