Bank Structure Conference

The Chicago Fed hosted the 45th annual Bank Structure Conference this week, and I showed up for part of it, since today included such heavy-hitters like Ben Bernanke (Chairman of the Fed) and Sheila Bair (Chairman of the FDIC). I apologize that I didn't get a chance to ask Bernanke "What is the air-speed velocity of an unladen swallow?" during the Q & A, but my lame excuse is that I didn't have a pen at the time to submit a question. Some other highlights of his speech included:

• Q: So, the stress test results are due to be released later today...I don't suppose you could give us the answers ahead of time?
  Bernanke: No.
• Q: The Cubs are playing the Nationals tonight, and given their records, what do you think the chances are for subsidies for these teams?
  Bernanke: I think we need to get Soriano back.
• Hecklers: Midway through the speech, two college-age guys strode into the middle of the aisle and shouted: "Fractional reserve banking is fraudulent! Austrian economics is the answer!" They then bolted for the doors. I was a tad disappointed that they didn't wait to be forcibly removed by burly security guards; I was hoping for tasers in fact.

Of the panelists on financial regulation reform, the best speaker was definitely the finance professor from Chicago, while the worst speaker was the American Bankers Association COO. Let me qualify that statement by saying this is with regards to content, not presentation skills, because the ABA lobbyist had by far the best presentation jokes, and was the most entertaining/funniest speaker. Unfortunately, the content of her speech was at best mistaken, and at worst intentionally inaccurate. My blood was boiling as she kept trying to put the blame on other institutions (investment banks, insurance companies); the first half of her speech was pretty much "TISNF, I can't believe ya'll are trying to cut our compensation." She kept arguing that banks were already regulated enough, that they did not underwrite and purchase the vast majority of subprime securities, and it was the shadow banking industry that needed more oversight. This may be true for 98% of banks, but the part she neglected to mention is that the largest banks (Chase, Citi, B of A) were just as "negligent" in buying and underwriting subprime mortgages as the I-banks.

It's striking how a person's job title is a very good proxy for what their speech is going to say, and how good their presentation skills are. It really explains how idiot politicians get elected in this country.