The White House is putting the full-court press on the financial industry to get it to stop resisting financial reform efforts that are making their way through the Senate. And, as Republican objections to the administration's proposals mount, it's ratcheting up the rhetoric.
Austin Goolsbee, a member of the President's Council of Economic Advisers, told CNBC today that he's "stunned" that derivatives have become a "sticking point" in the political debate over reform. (Hat tip to Business Insider, who first noticed Gooslbee's words)
"I thought everyone would be in agreement on [derivatives reform], except for, of course, the big banks," Goolsbee said. "The big banks have funded a massive lobbying effort through the Republican party."
Derivatives, Goolsbee argued, remain largely unregulated. private contracts that "threaten to blow up every financial institution in the country."
Here's more from Goolsbee:
"I want to see the Republican party stand up and say, 'Yes we're for putting loopholes into the derivatives law so they remain transparent so that they aren't regulated and remain totally non-transparent.' I don't think they're going to do it."
Other top White House officials met last week with the heads of some of the nation's largest banks and flat-out asked them to cease lobbying against financial reform, Bloomberg reports. President Obama's top eeconomic adviser, Lawrence Summers, reportedly asked industry chiefs to stop running anti-reform ads.
Here's more Bloomberg:
President Barack Obama's senior adviser David Axelrod and National Economic Council Director Lawrence Summers met with Goldman Sachs CEO Lloyd Blankfein, JPMorgan's Jamie Dimon, Bank of America's Brian Moynihan and about 12 other executives at an April 6 event in Washington hosted by the Financial Services Forum, said the people, who declined to be identified because the meeting was private.
The executives told the White House aides that while they support a regulatory overhaul, they have concerns about the bill sponsored by Senate Banking Committee Chairman Christopher Dodd, which includes new consumer-protection rules.