Phil Gramm is a pompous and self-righteous man. The Wall Street
Journal gave him some 2000 words on Friday, and he used 1000 of
them to defend the Gramm-Leach-Bliley Act of 1999 from the fault that
has been assigned to it for knocking down the regulatory defenses
against against Wall Street legerdemain. And who does he summon to
protect him history? His good friend Bill Clinton, as if he were a
credible witness to have anything to do with honesty about the past.
I looked at the ID line at the end of Gramm's op ed to find what he was doing now? Who was paying his keep? It turns out that he is now vice chairman of Union Bank of Switzerland (UBS) Investment Bank. I wonder how much he gets in salary and bonus because this is what he writes about restrictions on executive compensation: "...they are good fun for politicians but they are just one step removed from telling banks who to lend to and for what." Since the feds are funding these rogue and decrepit institutions it's only reasonable that they should have some say. No?
In any case, Gramm is not really a banker. He is a lobbyist, and if I were in charge of UBS I'd fire old Phil. He has no influence with anybody important in Washington these days, not Tim Geithner and not Larry Summers, not Mary Schapirio and not Paul Volcker. Anyway, the bank will need whatever cash it has. It is in deep shit.
Not only because, like any other big counting houses, it had bad banking habits. UBS has already been bailed out by the Swiss government once.
But because the United States government wants to see 52,000 accounts from American depositors whom the Justice Departments suspects of tax evasion, courtesy of UBS. This matter is very well described in the FT of Friday. Actually, the country's president has admitted that up to 300 American customers are guilty of tax fraud, which is a crime under Swiss law. Tax evasion, however, is not a crime. But even Swiss patriots cannot tell you the difference.
Ah, great patriot Phil Gramm, vice president of a bank that has sequestered nearly $15 billion of American assets.
The Swiss, of course, are experts at hiding money. They hid assets from family members who were survivors of Jews who had deposited cash, securities, gold in their banks. They hid assets from surviving depositers themselves. It took more than half a century for these banks (including UBS) to come, not clean exactly, but acknowledge their culpability and part with some cash. And not much cash.
P.S.: Mrs. Gramm was a director of Enron. Rancid money is a family business.