By Zachary A. Goldfarb, pill The Washington Post
The largest banks are larger than they were when Obama took office and are nearing the level of profits they were making before the depths of the financial crisis in 2008, according to government data.Wall Street firms — independent companies and the securities-trading arms of banks — are doing even better. They earned more in the first 2 1 / 2 years of the Obama administration than they did during the eight years of the George W. Bush administration, industry data show. (See data in an Excel file here.
Behind this turnaround, in significant measure, are government policies that helped the financial sector avert collapse and then gave financial firms huge benefits on the path to recovery. For example, the federal government invested hundreds of billions of taxpayer dollars in banks— low-cost money that the firms used for high-yielding investments on which they made big profits. Stabilizing the financial system was considered necessary to prevent an even deeper economic recession.
Neither the Bush administration nor the Obama administration, for instance, compelled banks to increase lending to consumers, known as “prime borrowers.” Such a step might have spurred spending and growth, although generating demand for loans may have proved difficult in the downturn.