By Simon Johnson
The credibility of a major report commissioned by the “Derivative End Users Coalition” – run by big banks against implementing the Dodd-Frank reforms – just collapsed.
As Andrew Ross Sorkin reports in the New York Times, the report has no meaningful substance – it is destroyed by the critique of Joe Stiglitz – and the consulting company (Keybridge Research) behind the report sought misleading credibility through falsely claiming affiliations with substantive academics.
At the end of Sorkin’s article is a remarkable admission by Mr. Wescott, the president of Keybridge, conceding these facts.
“When I told Mr. Wescott of Keybridge about Mr. Stiglitz’s comments, he replied that ‘the client had asked us’ to put the report together. ‘It was a hypothetical study.’”
Mr. Wescott admits that it is a bogus study (“hypothetical”) that was “asked” for – and in exchange for a fee they delivered what was asked for, i.e., a report that has no basis in fact or credibility. (See also my points about the report’s lack of substance from yesterday.)
This is lobbying for favor on the basis of misrepresenting what is in the public’s interest.
Nowhere in this Keybridge “study” or the Chamber’s press release or in any materials put out by the Coalition of Derivative End Users was any of this disclosed.
The industry is making completely baseless claims – and must resort to this kind of hollow chicanery. This report is revealed as nothing other than a deliberate attempt to mislead the public and to fool people on Capitol Hill.