Afternoon Must-Read: Ed Luce: Too Big to Resist: Wall Street’s Comeback

Edward Luce:
Too big to resist: Wall Street’s comeback – FT.com:
“It was right to let Citigroup stay in business in 2009…

…even though it was effectively bankrupt. But should it be so much larger than it was six years ago? Is it healthy that Citi lobbyists wrote the clause, almost word for word, that was tucked into last week’s spending bill?

The question answers itself. It also points to two glaring deficiencies that will come back to haunt Washington when the next crisis strikes…. There has been no improvement in Wall Street’s culture–or in Washington’s revolving door habits. Bankers dismiss Elizabeth Warren, the Democratic senator from Massachusetts, as a populist. Perhaps they should listen to Bill Dudley, president of the New York Federal Reserve and a former Goldman Sachs partner….

At some point there will be another Wall Street crisis. It could be a decade away, or maybe next year. Markets run in psychological cycles in which fear gives way to greed and then hangover. Greed is once more in the ascendant. No law can stop the next bomb from detonating. No regulator can foresee it. But they could do much more to be ready for it when it comes. Here Mr Geithner’s moral fundamentalists have a point…