Bankers attending the American Bankers Association's annual meeting this week are set to encounter an angry mob in the Windy City.
The Service Employees International Union, a pack of consumer groups, community advocates and even filmmaker Michael Moore have banded together in an effort they've coined "Showdown in Chicago" to protest the annual conference for the national banking trade group. "The same financial institutions that caused the economic crisis and took billions in taxpayer bailouts are back to earning incredible profits," the Showdown organizers said on its Web site. "Meanwhile, Americans face shrinking pensions, rising foreclosures and unemployment."
The Showdown group has various events scheduled around the convention, including picketing outside of the convention hotel. The headline event is a prayer vigil and a march that organizers expect 5,000 people to attend.
John Hall, a spokesman for the ABA, said that targeting its membership is misguided and demonstrates a broad-brush view of the financial services industry. "The bankers that will be at the conference in Chicago are community bankers, who are driving the vehicle of economic recovery" Hall said. "These are not Wall Street banks."
Ray Quintanilla, a spokesman for the Showdown, said that the ABA's lobbying efforts are at the root of the protests. A press release issued by the union said that the six largest banks and the ABA have spent $35 million to fight regulatory reform recently.
"The ABA is a powerful source for lobbying," Quintanilla said. "A lot of what we are seeing in the economy is a result of deregulation. We want them to consider some meaningful regulation."
A trans-Atlantic debate erupted last week over whether efforts to force more capital on systemically important institutions will ultimately prove futile.
The discussion was sparked by a speech Mervyn King, the governor of the Bank of England, gave to business leaders in Scotland. He argued that the only way to truly rein in institutions that are "too big to fail" is to chop them up into smaller pieces.
"To paraphrase a great wartime leader, never in the field of financial endeavor has so much money been owed by so few to so many," he said. "And, one might add, so far with little reform."
There was a clear motive behind King's comments: he hopes the Bank of England will regain supervision powers that were taken away earlier in the decade and given to the Financial Services Authority. But the comments also amounted to a challenge to regulators in the U.S. and other countries, who are more focused on simply raising capital requirements on mammoth institutions.
So far, American regulators do not seem to be biting. In a speech to the Exchequer Club, Federal Reserve Board Gov. Daniel Tarullo said downsizing institutions is easy to say but hard to accomplish. Fed Chairman Ben Bernanke said Friday that regulators can target big banks in a "subtle" manner.
According to Rep. Barney Frank, the chairman of the House Financial Services Committee, Republicans are too interested in holding up the Association of Community Organizations for Reform Now as a new scapegoat for the financial crisis. "Acorn has disappointed me with the laxity of its approach," he said. "But the degree to which my Republican colleagues focus on them bears out the old saying: 'Great obsessions from little acorns grow.' "