Mr. Brian Moynahan is the CEO of the Bank of America. He was paid $16 million last year, a rise of 23% ($14.5 million was given him in stock and $1.5m in salary). This was after the bank’s share price fell 5.9% over 2015 and has fallen a further 29% this year. During 2015 Bank of America had to re- submit its capital plan under the Fed’s annual stress test, and Moynihan had a battle with investors over whether he should remain Chairman when the bank’s stock was lagging behind that of other banks. (It is generally thought unwise to combine the role of chairman with that of CEO in any large public company). Meanwhile, my wife, who has an account with the Bank of America reports that her local branch has several members of staff typically sitting, peering at computer screens, and usually only one teller working, and a long line of waiting customers, with no one bothering to help them.
This is not free enterprise. It is neither free nor enterprising. An Epicurean government would break it up to serve actual people, especially in small towns and rural areas, where bank consolidation years ago sucked all the savings out of small regional banks and left their customers without lending facilities. The whole Amerocan banking sector has been shamefully mismanaged. Are there no grownups around?
As Bernie Sanders says, if a bank is too big to fail, it is too big to exist. These corrupt financial institutions have often been engaged in illegal or at least highly unethical behaviour. They are totally unaccountable for their actions. They pay a paltry amount of tax, while making excessive profits. Their influence on the political system is totally disproportionate. They are far too eager to evict people from their homes. Hillary Clinton and the Republican establishment defend them at their peril. The rise of both left and right wing populism is in large part due to the alliance between Wall Street and Washington.
Having said all that, there is hope. Once the banks have been broken up, they will be forced to invest in their respective localities, instead of in the international markets, improving the lives of ordinary Americans. I also think some of the banks should be nationalised and then merged with existing federally-owned banks to create one new American Construction Bank- similar to what they have in China. This would invest in federal infrastructure projects, as well as lend money to the states for their own projects, at low interest rates of course. This new bank would make a profit, but profits would be reinvested back into the country, instead of being kept in some offshore account. The American Construction Bank, along with tighter regulation of the private banks, would create a far more ethical and accountable system. Banks could still work closely with businesses for their mutual benefit, but the unholy relationship between government and any private enterprise must end; personally, I’m an increasing fan of publically-funded elections, but that’s a topic for another time.