Subprime Mortgage Crisis Solutions Debate - Lobbying

Lobbying

Banks in the U.S. lobby politicians extensively, based on a November 2009 report from employees of the International Monetary Fund (IMF) writing independently of that organization. The study concluded that: "the prevention of future crises might require weakening political influence of the financial industry or closer monitoring of lobbying activities to understand better the incentives behind it."

The Boston Globe reported during that during January–June 2009, the largest four U.S. banks spent these amounts ($ millions) on lobbying, despite receiving taxpayer bailouts: Citigroup $3.1; JP Morgan Chase $3.1; Bank of America $1.5; and Wells Fargo $1.4.

Prior to the crisis, banks that lobbied most aggressively also engaged in the riskiest practices. This suggests that the government was generally a force for caution and conservatism, while private industry lobbied for the ability to take greater risk.

After the Financial Crisis, the financial services industry mounted an aggressive public relations and lobbying campaign designed to suggest that government policy rather than corporate policy caused the financial crisis. These arguments were made most aggressively by Peter Wallison of the American Enterprise Institute, a former Wall Street lawyer, Republican political figure, and longtime advocate of financial deregulation and privatization.