F- U –
While most students love a snow day, dedicated teachers mourn the interruption in learning. The cancellation of day two of F-U was no exception.
The two-day F-U which started yesterday is more formally known as "Financial Services University" – a chance for congressional staff-er/students to sharpen their number 2s and head to the Rayburn office building on Capitol Hill for "lessons" from top bankers and industry lobbyists. Today’s snow-stopped classes were to include: Derivatives 101 (definitions and discussions); Housing (what every consumer should know about mortgages); and Banking (an overview).
F-U is sponsored by the Financial Services Roundtable whose prestigious membership includes top bailout recipients Citi, BofA, and JP Morgan, among others. According to the organization’s website, "Job One" of FSR is "legislative and regulatory advocacy." F-U students (according to the F- U syllabus) are "new staffers and staffers who have recently added financial service issues to their portfolio, as well as, the seasoned staffer and who wants to learn more about the major areas of importance impacting our nation and economy."
F-U started yesterday with tutorials from Richard Davis, president and CEO of U.S. Bancorp, James Smith, chairman and CEO of Webster Bank, and Robert Kelly, CEO of Bank of New York. See the original report here. In yesterday’s lesson, students learned that the financial sector has "zillions" of regulators (they didn’t question why the zillions didn’t include a single one focused on the American consumer). They also learned that Kelly is "a big believer in fixing stuff" (a job undoubtedly made easier with $3 billion in TARP funds). Most importantly, they learned that their teachers are always available for private tutoring. "Call us," said Davis, "We’d love to help" (an offer he surely also extends to his 42,000 employees and millions of customers).
In today’s lesson, staffer-students would have had the chance to learn even more. In Derivatives 101, students might have learned how much it will cost the industry (which spent $300 million on lobbyists last year) to convince Senators on the Ag committee to offer a broad definition of a major swap participant, which would in effect allow exactly the same kind of opaque products that helped cause the crisis to continue to flood the market. Apparently any transparency offered by trading on a registered clearing house could stop institutions from meeting hedge accounting requirements (the lesson would have to also explain why that’s a bad thing). In Housing Class students might have looked forward to studying why it is possible to re-finance a home with a mortgage that has a one-in-five chance of putting a homeowner on the street but impossible to buy a toaster with the same risk. This lesson would have of course explained exactly why a Consumer Financial Protection Agency would have "negative consequences for consumers" as FSR President and CEO Steve Bartlett asserted in his testimony to Congress in July. Banking Class would have focused on why lawmakers allow financial institutions to gamble with taxpayer money (a short lesson of course as we would have already covered the $300 million worth of lobbyists in Derivatives).
Given all these great lessons, it is a real shame that day two of F-U-was canceled.
Luckily, the snow won’t keep us from learning the most important lesson of all – why top financial executives would spend a day with 20+ 20-somethings. Smith said it best when he told his eager students, "(because) You’ll be involved in actually writing the legislation that will affect our futures."
In other words, "Hey America – F-U."